Citizen Preferences and Awareness of Tax Revenue Options: Public Opinion on South Carolina’s “Tax Swap”

Abstract

Tax complexity makes it challenging for citizens to understand how taxes imposed by state and local governments affect their tax bill. This paper considers citizen awareness and preferences for tax revenue options in the presence of tax features that increase complexity. The researchers mailed a survey questionnaire to a random sample of South Carolina voters measuring their level of knowledge and preferences for school tax funding during the last half of 2021. A sizable majority of respondents report the property tax as their least preferred option to fund school operations when compared to sales tax or commercial property tax, with variation in support by ideology, homeownership, and partisanship. However, respondents are broadly uninformed of current school tax funding mechanisms regardless of college degree attainment, ideology, and other important indicators. Most respondents are not aware of the “tax swap” that replaced residential property tax with a one-cent sales tax to fund South Carolina school operations.