Category Archives: Taxes

The transportation penny passes

This email just in:

Friends and Leaders,

THE PENNY PASSED!

Just left 2020 Hampton with final numbers including absentee and precincts:

Question 1  YES    74,029                NO  64,684’

QUESTION 2  YES  69,391               NO  62,884

This is gratifying. Congratulations to all those who worked hard to make this happen, and to the people of Richland County for making this decision. The community has decided to build a better future for itself, and that’s a very good thing.

I look forward to seeing the improvements, in our bus system and in the county’s roads…

Stepping back from the fiscal cliff?

Well, here’s an encouraging post-election development:

Quickly pivoting the political conversation from President Obama’s reelection to Washington’s looming budget battles, House Speaker John A. Boehner on Wednesday offered a potential path to compromise, saying Republicans are “willing to accept new revenue” to tame the soaring national debt and avert an ugly battle over the approaching “fiscal cliff.”

With Obama’s decisive electoral victory and Republicans’ hold on the House, with a slightly smaller majority, Boehner (R-Ohio) said Tuesday’s election amounted to a plea from voters for the parties to lay down their weapons of the past two years and “do what’s best for our country.”

“That is the will of the people. And we answer to them,” Boehner said at an afternoon news conference at the Capitol. “For purposes of forging a bipartisan agreement that begins to solve the problem, we’re willing to accept new revenue, under the right conditions.”…

Last night, I was hearing that it appeared unlikely that House Republicans,  having held onto their power, would be any more willing to talk compromise than they have since 2010.

So this is good news. We may be able to arrive at a reasonable solution — although I’m sure the end product won’t be pleasant or fun for anyone involved, including us, the people.

But here’s the tough question: Can Boehner back this up, or will Eric Cantor be explaining to him right about now that he’s not allowed to do this?

The Richland County voting debacle

Early this morning, Doug Ross expressed his displeasure that the sales tax referendum for transportation had passed in Richland County.

Well, maybe and maybe not.

I got an email from the campaign pushing for a “yes” vote at 12:54 this afternoon, saying:

Friends and Leaders,

Some of you have asked about the results of the penny referendum from yesterday’s vote.  As you may know, we are still waiting on the count from 20 boxes across the county and the absentee ballot.

You all will be the first to know as soon as we hear!

Which brings me to my topic. If Richland County leaders are ever to hope to win any trust from the people who voted “no” on that referendum purely because they don’t trust the effectiveness of the aforementioned Richland County leaders, then they need to get to the bottom of what caused the outrageousness of people — including Mayor Steve Benjamin — still standing in line to vote into the middle of the night. As the mayor said on the telly last night (or was it in the wee hours of this morning? I forget), if this were a statewide problem, that would be one thing. But this stands out as an utter failure in Richland County.

Who was responsible? Whose job was it to carry out the simple, obvious task of making sure the machines worked at some time before 7 a.m. Tuesday? What will be done going forward to make sure this never, ever happens again.

I hope to learn some answers soon.

In case you happen to be, or own, a business…

Because, as Mitt Romney says, corporations are people, too, I pass on this advisory from Randy Halfacre at the Greater Lexington Chamber for my friends out there who may be corporations. Or at least own or operate businesses:

It was recently announced that tax information for as many as 657,000 S.C. businesses was compromised as part of the recent cyber attack at the S.C. Department of Revenue.
The State of South Carolina has arranged through Dun & Bradstreet Credibility Corp for free credit monitoring services for all S.C. businesses for the life of the business.
Starting Friday, Nov. 2 at 8 a.m., businesses can register at www.dandb.com/sc/ or by calling 800.279.9881 to receive the credit monitoring service.  After signing up, businesses will be notified of any changes to their accounts.

The Governor’s press conference yesterday regarding the breach is available here.

Lott, others endorse ‘yes’ vote on the penny

Nicole Curtis from the Columbia Chamber just saved me a heap o’ typing by sending out this from the presser I attended at the Clarion Townhouse this morning:

Richland County Sheriff Leon Lott officially endorsed the Transportation Penny Plan on Tuesday at a Unity Rally to demonstrate the strong and broad base of support for the countywide plan to improve roadways in the Midlands and save the area’s vital bus system.

“Passage of the penny will help protect public safety in Richland County,” Lott said in his endorsement of The Penny. “The penny will provide infrastructure that can be life-saving. It will pave hundreds of dirt roads across the country. This is about far more than convenience. When sheriff’s deputies and ambulances can’t get down a dirt road because it’s turned to mud, people can die.”

Other local leaders, including Columbia Mayor Steve Benjamin joined Lott at the Rally, which was held at the Clarion Townhouse in downtown Columbia exactly one week before the crucial Nov. 6 vote on The Penny.

“Those who oppose this initiative say it costs too much. But it’s a no vote that costs too much,” said Benjamin. “It would mean the loss of over 16,500 new jobs and billions in new investments. It would mean continuing to pay the terrible cost of having the second most dangerous roads in the state. It would cost our community millions in federal matching funds for transforming our bus system. It would lead to fees that would cost our families twice as much as The Penny. It would put the entire burden of transportation costs on Richland County residents, rather than letting folks from outside share the load.”

The event represented a diverse cross-section of individuals, including business, community and faith leaders, elected officials and various activist organizations.

Others on hand at the rally included members of the Richland County Legislative Delegation, Columbia City Council and Richland County Council, representatives from the United Way of the Midlands, Sustainable Midlands, Greater Irmo Chamber of Commerce, Greater Columbia Chamber of Commerce, Eau Claire Community Council, River Alliance, League of Women Voters, Conservation Voters of South Carolina and the Midlands Business Leadership Group, and additional neighborhood, faith and community leaders.

“Today our answer is a resounding YES – YES we want more jobs, YES we want local control, YES we want a first class public transit system and YES we want safer roads,” said Bunnie Ward of the United Way of the Midlands. “By investing today and saying YES, we will ensure a successful future for our community for generations to come.”

The Penny is on the Nov. 6 General Election ballot as two separate “Sales and Use Tax” questions. If approved by voters, it would add one cent to the Richland County sales tax for a period of 22 years to raise funds for vital roadway improvements and to provide long-term support for the local bus system.

Citizens for a Greater Midlands, the group pushing passage of this referendum, has done quite a job of assembling a broad coalition, as evidenced in the third paragraph from the end.

Of course, as I’ve noted before, the other side has a lot of passion going for it. Or at least, I thought it did. I was a bit surprised that, unlike at the last one of these events I attended in the same location, there wasn’t a single “no” counterdemonstrator outside. And this event was publicized in advance. I don’t know what happened to them today…

Last night’s CRC forum on the penny

Before I head out to go moderate this forum at the library about the presidential election, I’ll share a few words about the Community Relations Council’s forum last night on the transportation sales tax referendum.

On the whole, it was a success I think, in terms of providing a civil place for folks on opposite sides of a local issue to share their views. Although sometimes the civility did seem to wear a bit thin. Redfern II has a somewhat loud, bombastic delivery style that can make it sound like things are getting out of hand, even when they are not. Michael Letts seemed to have quite a chip on his shoulder on the issue, but controlled himself. While on the “yes” side, I thought County Councilman Paul Livingston was going to lose his temper at the “no” folks once or twice.

Fortunately, things stayed in the realm of merely “lively,” which is a good thing. Moderator David Stanton did a good job.

One thing that made me glad, since I was on the committee, and since I tell anyone who wants to know that I’m for the referendum — I don’t think anyone can legitimately complain that the “no” side got short shrift in this forum. While the reasoning was better on the “yes” side — in my opinion, of course — there was more passion on the side of the “nos.” And I don’t say that to denigrate their arguments — they presented plenty of points that I’m sure were effective among a lot of the audience.

A quick summary of the positions presented by the panelists:

  • Lee Bussell, Yes: This referendum presents an opportunity for this community to come together and address its real challenges together, such as the fact that Richland County has the 2nd-deadliest roads in the state.
  • Daniel Rickenmann, No: It’s not a penny; it’s a billion dollars.
  • Paul Livingston, Yes: This is a community plan, not a county council plan.
  • Don Weaver, No: Stressed the impact on the poor of an additional penny on every dollar spent.
  • Jennifer Harding, Yes: Expressed concern about congestion and traffic safety in her party of the county (the Northeast).
  • Redfern, No: The white leadership of the community has given black citizens the short shrift up to now; why should it be trusted this time? (He had a lot of zingers and crowd-pleasers, such as “If you want to get nowhere fast, take the bus.” But his overall theme was distrust.)
  • Brian DeQuincey Newman, Yes: The penny is the answer to the challenge Redfern poses — it will bring in the funds CMRTA needs to provide decent service.
  • Michael Letts, No: “Local control” sounds great, but he doesn’t want to pay this local tax for roads on top of the ones he already pays at state and federal level. Also, wants the bus part separated from the capital, roads part.

I take those mostly from the participants’ opening remarks, but they also give you an idea what went on the rest of the time.

As I said, a lot of energy on the “no” side. Three times, “yes” panelists were asked to speak up or get closer to their microphones. No one had to ask the “no” folks to do that.

And to the extent that minds were changed, it was in the “no” direction. The audience was asked to turn in ballots “voting” on the matter both before and after the event. Not everyone did, but here are the results from the ones who took part, according to CRC Executive Director Henri Etta Baskins:

  • BEFORE: 32 Yes; 31 No; 11 Undecided
  • AFTER: 32 Yes; 34 No; 8 Undecided

NOTE — those numbers were just updated (the number of undecided AFTER was wrong previously)…

Words from another time, another universe

Back in the days of typewriters, dictionaries were a great obstacle to my developing what my detractors call “time-management skills.” I couldn’t look up one word without running across another that fascinated me, which in turn caused me to look up another, then three more, and one and on, each word opening the floodgates of dopamine in my brain as I utterly forgot what I had set out to do.

The Web is a dictionary taken to the nth power.

Today, I stuck up for our Founders’ vision of a republic rather than a democracy, which caused Bud to say fine, if that’s what you want, then let’s return to precisely their vision. That caused me to say that I was for repealing the 17th Amendment. Then, when I went for a link to explain to readers which amendment that was, I started reading about the debate at the time over this “reform.” I saw that William Jennings Bryan (you know, the guy Clarence Darrow took apart at the Monkey Trial) was for the change, and Elihu Root opposed it. Thinking Mr. Root was perhaps a man after my own mind, I went and looked him up.

And I read on Wikipedia this excerpt from a letter he wrote to The New York Times in 1910, while serving as a U.S. senator from New York:

It is said that a very large part of any income tax under the amendment would be paid by citizens of New York….

Elihu Root

The reason why the citizens of New York will pay so large a part of the tax is New York City is the chief financial and commercial centre of a great country with vast resources and industrial activity. For many years Americans engaged in developing the wealth of all parts of the country have been going to New York to secure capital and market their securities and to buy their supplies. Thousands of men who have amassed fortunes in all sorts of enterprises in other states have gone to New York to live because they like the life of the city or because their distant enterprises require representation at the financial centre. The incomes of New York are in a great measure derived from the country at large. A continual stream of wealth sets toward the great city from the mines and manufactories and railroads outside of New York.

Wow. Wow. Wow. Imagine that. A serving politician who actually wrote not only in favor of an income tax when there wasn’t one, but told his own constituents why they should shoulder a particularly large portion of that burden. Now there’s a man of principle for you.

You will ask now whether he was re-elected. Well, he didn’t run again.

But it’s not like he retired. He went on to serve in several prominent capacities. In 1912, he was awarded the Nobel Peace Prize, for “his work to bring nations together through arbitration and cooperation.” Nevertheless, he would later oppose Woodrow Wilson’s initial position of neutrality as WWI broke out. He believed German militarism must be opposed.

He was a reluctant candidate for the Republican nomination for president in 1916. Charles Evans Hughes won the nomination, and went on to lose to Wilson.

I think I might have voted for Root, given the chance.

The transportation referendum campaign kickoff

Should have posted about this yesterday and didn’t get to it. Of course, the advantage to waiting is that I can save myself a lot of typing by quoting from the news stories. From Columbia Regional Business Report:

Supporters of a one-penny increase in the sales tax in Richland County kicked off a campaign this week to win voter approval of a plan they said would raise $1 billion over 22 years, address critical transportation needs and create an estimated 17,000 new jobs.

The issue will be on the Nov. 6 general election ballot for all Richland County voters.

The transportation penny, according to the county’s proposal, would increase sales tax in Richland County to 8 cents on the dollar on proceeds of sales, with the funds going to improve roads, support the bus system and increase bike and pedestrian greenways. The transportation penny would increase the sales tax to 2 cents on the dollar on groceries, except for purchases made with food stamps, which are exempt from the transportation penny.

The transportation plan that would be funded by the penny sales tax has a major economic development component, supporters say. One of the projects that it would fund is the Shop Road extension, a new section of road in southern Richland County that could open up large new industrial sites that are attractive to manufacturers and allow water and sewer utilities to be extended into the area…

And from The State:

Touting “more jobs, safer roads, local control,” about 80 people gathered Wednesday to roll out a campaign for a Richland County sales tax for transportation.

Citizens for a Greater Midlands, organized by business leaders making a second effort to pass the penny-on-the-dollar tax, were countered by a dozen sign-carrying protesters on the sidewalk along Gervais Street, outside the Clarion Hotel Downtown. Voters rejected the referendum by about 2,200 votes two years ago.

Richland County Councilman Paul Livingston said the tax to fund roads, buses, sidewalks and bike lanes was the single most important issue to arise in his 22-year tenure in county government.

“Some say we can wait on the state and federal governments,” Livingston said. “Folks, we’ve got to do it ourselves.”

He said there were “no viable alternatives” to a local sales tax to address what he characterized as a crisis in the county’s transportation system. Major roads are congested and in poor repair, funding for the bus system is tenuous and pedestrian and bicycle accidents are common, he said later…

I’m going to take Dawn’s word for it that there were a dozen protesters outside, although when I walked through them on my way in and out — the kickoff was conveniently right around the corner from my ADCO office — it didn’t seem like that many. Of course, I would imagine that relatively few people who will vote “no” are so passionate about it that they want to stand on a curb with a sign. One of them who did was longtime antitax activist Don Weaver, who greeted me pleasantly when he saw me come out.

What I do know is that the room with the supporters inside was fairly packed, and consisted largely of people who devote themselves to working for the advancement of the community, from business leaders to elected officials.

Aside from Councilman Livingston (who, like other elected officials, stressed he was there as a private citizen), we heard from a Midlands Tech student who depends on the bus to get her to school so that someday she can have a job that will enable her to afford a car, two or three other bus riders, my good friend Jennifer Harding (former ad director for The State, now in real estate), Steve Benjamin, Brian DeQuincey Newman, and Cameron Runyan. Rival adman Lee Bussell spoke for the Chamber — he was the one who stressed how the Shop Road extension would help open up prime locations for industrial recruitment.

The most compelling argument for this plan came from Mr. Livingston. He charted the path of this process, from the 39-member citizens group six years ago that drafted the plan that has changed little since then, and made the salient point — this is it, the only viable vehicle for both saving our bus system and funding other transportation priorities.

People who don’t want these things for our community will of course vote against it, which is their right. But people who do want any of these things, and vote against this plan because everything about it isn’t perfect, are fooling themselves and doing their community a disservice. Because this is it. It took a long time to get to this point with a lot of people working hard to do so, and there has been NO effort by anyone I’ve seen to put an alternative plan on the tracks.

SC DOT: One example of how SC constantly underfunds basic functions of government

This post should be seen as the background to this little drama over the governor’s vetoes, to provide some perspective. What seems to have been missing on most, but not all, of Nikki Haley’s vetoes has been a clear explanation of what she would spend the money on instead.

Her ideology prevents her from setting out powerful arguments for alternative spending plans, because she, like the governor before her, lives in a fantasy land in which the government of South Carolina simply spends too much in the aggregate. That South Carolina bears no resemblance to the one in this universe.

The truth is that South Carolina appropriates far too little for some of the most fundamental functions for which we rightly look to the public sector. And the deficit between what we spend on those functions and what we should in order to have the quality of service other states take for granted is sometimes quite vast, involving sums that dwarf the amounts involved in these vetoes that you hear so much fuss about.

What is needed is a fundamental reassessment of what state government does and what it needs to do, to be followed by the drafting of a completely new system of taxation to pay for those things. Our elected officials never come close to undertaking these admittedly Herculean tasks. But they should. The way we fund state government needs a complete overhaul, and spending time arguing about, say, the “Darlington Watershed Project” doesn’t get us there.

This is something I’ve long understood, and often tried to communicate. I was reminded of it again at the Columbia Rotary Club meeting on Monday.

Our speaker was SC Secretary of Transportation Robert C. St. Onge Jr. He’s a former Army major general, having retired in 2003 — until Nikki Haley asked him to take on DOT in January 2011. Some of his friends congratulated him at the time. Those were the naive ones. The savvy would have offered condolences.

Normally, public speakers like to inspire with phrases such as “From Good to Great.” Sec. St. Onge’s talk was far more down-to-Earth, far more realistic. He entitled it “Getting to Good.” And once he laid out what it would take for SC to get to “good enough” — to get all of the roads we have NOW up to snuff, much less building any roads we don’t have but may need for our economy to grow — it was obvious that we aren’t likely to get there any time soon.

The secretary started out with some background on how we have the fourth-largest state-maintained highway system in the country, after Texas, North Carolina and Virginia. He didn’t have time to explain why that is, but I will: It’s because until 1975, county government did not exist in South Carolina. Local needs were seen to by the county legislative delegation, one of the more stunning examples of how our Legislature has appropriated to itself functions that are not properly those of a state legislature. When we got Home Rule, supposedly, in 1975 and county councils were formed, many functions that had been done on the state level stayed there. So it is that roads that would have been maintained by county road departments in other states are handled by the state here. It’s not that we have more roads, you see — it’s that more of them are the state’s responsibility.

He also noted how woefully underfunded our system is. Georgia, for instance, has less road surface to maintain, but twice the funding to get the job done — and three times as many employees per mile. He alluded to why that is, and I’ll explain: We have the most penny-pinching state government I’ve ever seen, with lawmakers who (contrary to the fantasies you hear from the likes of Mark Sanford and Nikki Haley) would rather be tortured than raise adequate money to fund a decent state government. OK, so the retired general didn’t explain it that way. He just mentioned the fact that we haven’t raised the inadequate gasoline tax that funds his department since 1987 (the year I arrived back in SC to work at The State). Add to that the fact that the tax is levied per gallon rather than per dollar spent, and you have a recipe for a crumbling road system.

Here’s the secretary’s full PowerPoint presentation if you want to look at it. If you don’t, at least look these representative slides, which sketch out the basic challenges…

Above compares us to neighboring states. Note that only North Carolina has our bizarre problem owning responsibility for most of the roads.

This is a breakdown of the categories of roads SC maintains at the state level. Note that almost half are secondary roads for which the state gets no federal funds. This is where the state is squeezed the hardest.

Above is what it would take to get just the interstates in SC up to “good” condition, and keep them there.

This is what it would cost to fix up and maintain all those secondary roads, which make up most of the state’s responsibility.

This is the most important slide. This is what South Carolina needs to spend, and has no plans to spend, to get the roads it has NOW up to good condition, and maintain them in that condition.

Gov. Haley could arguably justify ALL of her vetoes by saying, “We need to put it all into our crumbling roads.” Then, after she had eviscerated all of those agencies as being less important than our basic infrastructure, she would have to turn around and call for a significant increase in the state gasoline tax, to come up with the rest of what is needed.

But our elected state leaders never go there. They either don’t understand this state’s basic needs, or aren’t honest enough to level with us about them. They’d rather truckle to populist, unfocused, unthinking resentment of taxes, and government in general, than be responsible stewards of our state’s basic resources.

That’s the money picture. Beyond that, here are some small things that in the aggregate add up to a big problem. If our governor won’t take on fully funding our state roads system, maybe she could work with the Legislature to get rid of some of the worst white elephants that DOT is saddled with:

This is a parking lot in Fairfield County that DOT is required to maintain. Sec. St. Onge would like to get rid of it, but can’t.

Ignore the dirt road, and look at the cemetery that DOT is required to maintain in Saluda County. Sec. St. Onge would like to get rid of that, too, but he can’t.

Here’s a road leading to a church in Florence County, which DOT is also required to maintain. The church is the only thing that the road leads to. Sec. St. Onge would like to give it to the church, and the church’s pastor would like to have it. But guess what? They can’t make it happen.

So… I’ve given you examples here from but ONE agency illustrating how we tolerate the intolerable, and refuse to fund the necessary, in our state government. THIS is the sort of thing we should be discussing, instead of having unnecessary culture wars over the Arts Commission.

A couple of last thoughts: Before any of you who think like Nikki Haley’s base start trying to dismiss all this by quibbling about what “good” means, or going on a rant about how these government bureaucrats just always exaggerate the need for funds in order to pad their fiefdoms, consider the following:

  1. This is Nikki Haley’s chosen guy to run DOT, not some “career bureaucrat” she inherited.
  2. This is a retired general officer — a guy with a very comfortable, generous retirement package — who did not have to take this job, and does not need it to improve his lot or to define himself. He’s about as objective and practical a source you can find for leveling with you about such things as this.

Silly me, for thinking DeMint cared what I thought

Couldn’t help responding to Jim DeMint today when he Tweeted,

My response was in two parts. First, I answered his question: Yes!

I had read with interest the top story in The Wall Street Journal this morning, which said that the long logjam on national legislation to require online businesses to pay sales taxes just like their bricks-and-mortar competitors may finally have broken:

Republican governors, eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases, a significant political shift that could soon bring an end to tax-free sales on the Internet.

Conservative governors, joining their Democratic counterparts, have been making deals with online retail giant Amazon.com AMZN -1.09% to collect state sales taxes. The movement picked up an important ally when New Jersey Gov. Chris Christie—widely mentioned as a potential vice-presidential candidate—recently reached an agreement under which Amazon would collect sales taxes on his state’s online purchases in exchange for locating distribution facilities there.

Mr. Christie called taxation of online sales “an important issue to all the nation’s governors” and endorsed federal legislation giving all states taxing authority.

This should lead to quick resolution, in a rational universe, since Amazon has said they support a national solution. And that’s very good news for states like South Carolina, which have unwisely shifted so much of their tax burdens to sales taxes just as conventional, “analog” store sales have been drying up.

I was particularly interested because the change that had come about was that Republican governors, such as Chris Christie, saw the need to do something about the fact that their states’ coffers had been depleted by the shift of our economy to online shopping.

It caused me to wonder what it would be like to have a real conservative Republican governor, rather than a darling of the Tea Party or the Club for Growth, one who — like any real conservative — believes in responsible governance, one who sees his or her role as a steward of the state’s public sector.

And then I remembered, that I did experience that, for years, when Lamar Alexander was governor in Tennessee. And so it is fitting that Lamar is the senator pushing this legislation:

Seizing on the recent political shift, Sen. Lamar Alexander, a Tennessee Republican, and co-sponsors from both parties are attempting to speed up action on a bill they wrote to give states authority to compel online companies to collect sales taxes.

One of the co-sponsors, Sen. Dick Durbin (D., Ill.,) said, “It gets down to a basic issue…of simple fairness for small businesses that create jobs and opportunities all across America. And with the sales taxes they collect, they provide for local police and firemen, for the sewers and streets.”…

Oh, but wait… as soon as I said, Yes!, I realized that Sen. DeMint’s question was purely rhetorical, meant only to set up his announcement that he’s leaping into the fray to fight against common sense.

You can always rely on Jim DeMint. Unfortunately.

Silly me, for thinking Jim DeMint cared what I thought.

What, Me Worry about what YOU think?/File photo from an editorial board meeting in 2007.

Romney: No, wait — TODAY it’s a tax…

photo by Adam Glanzman, Flickr

Wait a minute… I see he said this yesterday, which means, I suppose, we might hear something else today. But in the meantime, here’s what he said yesterday:

UPDATE: And now we’ve come full circle in all the “penalty” vs “tax” talk. Mitt Romney has spoken and clearly affirmed that the Affordable Care Act’s individual mandate is a tax, directly contradicting his senior adviser, Eric Fehrnstrom, who had said earlier this week that it was a penalty. Romney tried to explain the contradiction by noting in an interview with CBS News that it was all about the Supreme Court’s majority opinion. “While I agreed with the dissent, that’s taken over by the fact that the majority of the court said it’s a tax, and therefore it is a tax. They have spoken. There’s no way around that,” Romney said.

When Romney was asked whether the fact that he was unequivocally calling the mandate a tax meant he had changed positions on the issue, the Republican focused on President Obama, saying he “has broken the pledge he made” because “it’s now clear that his mandate, as described by the Supreme Court, is a tax.”

Obama’s campaign, however, quickly seized the opportunity to say that Romney “contradicted his own campaign, and himself,” reports the Washington Post

You ever see such a case of somebody trying to have it every which way?

Roughly, here’s the timeline:

  1. Romney pushes through health care reform as governor, and it includes a mandate that everyone have insurance. He goes around bragging about it for years, as well he might…
  2. But then, President Obama pays him the complement of pushing health care reform that does the very same thing, and suddenly Mitt’s not so proud of what he’d done, because he wants the votes of people who spit on the ground every time Obama’s name gets mentioned. If Obama did it, the thinking goes, it’s evil. So Romney quits bragging.
  3. Then, the court says it’s not a mandate; it’s a tax. And the GOP seizes on that, because if there’s anything nearly as evil as Barack Obama in their book, it’s a tax.
  4. But then Romney’s aide says the court’s wrong, because Romney, having created just such a mandate, ought to know a mandate when he sees one. Which stands to reason.
  5. But then Romney adopts a position of Hey, what do I know? It may look like a mandate to me and this other fella, but the court says it’s a tax, so it’s a tax. And taxes are bad, harrumph, harrumph.

At this point, is there anyone left in the country, of any philosophical bent, who’s enthusiastic about voting for Mitt Romney in the fall? Oh, some are eager to vote against Obama; that hasn’t changed. But are they pumped about voting for Romney? I doubt it…

New GOP meme: attacking Obamacare as a tax

Recovering from the blow to their position on Obamacare, Republicans (except Mitt Romney, whose signature achievement as governor was just vindicated, although you won’t hear him say so in this bizarre political climate) have already shifted tactics.

They are genetically compelled to attack, attack, attack the president. So their new means of doing so is to seize upon the court’s assertion that Obamacare constitutes taxation, and attack it accordingly (all taxes being, according to their ideology, bad). Lindsey Graham, being the smartest Republican in Washington, was among the first to make this shift:

To our Democrat colleagues, stand by your tax increase or stand with us to Repeal and Replace Obamacare.

(Note the way he says “Democrat colleagues.” This is a subtle ruse on his part to hide from his base the fact that he is as smart as he is: Look at me! I don’t know the difference between a noun and an adjective any more than you do! But then, he hurts himself with that same base by calling the enemy “colleagues.”)

Democrats, being partisans, will probably not respond any more intelligently.

But here’s how I wish they would respond: By saying, OK, it’s a tax. So let’s stop fooling around. Let’s replace this with single-payer, which of course we would all support through our taxes.

I’d like to see that, but I’m not holding my breath. I’d done enough of that, waiting on the Supremes to make up their minds.

Of Graham, taxes, Norquist and unicorns

I was a bit out of the loop last week, and missed this:

As a conservative Republican, Lindsey Graham has never had a problem promising not to raise taxes.  Like almost every other Republican member of Congress, he has signed the anti-tax pledge put forth by Grover Norquist’s group Americans for Tax Reform.

But now Graham says the debt crisis is so severe that the tax pledge — which says no tax loopholes can be eliminated unless every dollar raised by closing  loopholes goes to tax cuts — has got to go.

“When you eliminate a deduction, it’s okay with me to use some of that money to get us out of debt. That’s where I disagree with the pledge,” said Graham…

Sounds perfectly reasonable to me. But it sent Grover Norquist into orbit, ranting about unicorns:

Grover Norquist, president of Americans for Tax Reform, is none too pleased.

“This was a brain fart, not a real idea,” he told me in a phone conversation just now. “It doesn’t scare me. I think what he was doing was answering a hypothetical question to show how hypothetically open-minded he was about something.”…

He said the Senator was making the same mistake Ronald Reagan made in 1982 and George H.W. Bush did in 1990: believing congressional Democrats who promise a ratio of spending cuts to tax increases, in this case four-to-one.

“Pinocchio was told by the fox and cat that this would be” a good idea, Norquist said. He lampooned Graham for being disconnected from the reality of fiscal negotiations, comparing him to his three-year-old daughter.

“It’s like having that conversation about what color unicorn you like, while in the back of your mind you know there’s no such thing. ‘Grover, why don’t you like green ones?’ But there aren’t any ones! I have a three year old who says this a lot. She has green unicorns, but we don’t need them in the Senate.”…

I’m not sure exactly what he means, but he seems to be saying that presuming to actually deliberate with the other member of the Congress who, although of a different party, were elected just as legitimately to that body as Graham was (you know, as the Framers of the Constitution envisioned), is as fantastic and ridiculous as the existence of unicorns.

Is that how you read it?

There is the world envisioned by the Framers, and then that envisioned by Grover Norquist. In the latter, all elected representatives do exactly what Grover Norquist tells them to do. I prefer the former.

If Mitt loses election, he also loses $5 million a year

The AP reports on an additional reason for Mitt Romney to run really, really hard to win this thing:

WASHINGTON (AP) — To see where the presidential candidates stand on taxing the rich, just look at how they’d tax themselves. Under his own proposal, Mitt Romney would pay half what he would under President Barack Obama’s tax plan. For a man of Romney’s means, that could save almost $5 million a year.

For Obama, not as loaded as Romney but still well-off, losing re-election could provide a tax windfall. He’d save as much as $90,000 a year if Romney’s plan were enacted rather than his own tax-the-rich vision.

Two nonprofit research groups, the liberal-leaning Citizens for Tax Justice and conservative-leaning Tax Foundation, did the calculations, based on the most recent completed tax returns released by the candidates. Compared with what they owed in April, both men would be dinged in 2013 under Obama’s proposal, along with other wealthy taxpayers. They could expect savings under Romney, depending on which tax breaks the former Massachusetts governor decides to oppose….

That’s assuming, of course, that paying a lot more in taxes matters to Mitt. It apparently doesn’t to his opponent, but of course, he has less to lose.

If I had Mitt’s fortune, I don’t think it would matter to me. But then, that’s probably because I’m not the kind of guy who was ever motivated go out and amass all those bucks. Chicken or egg thing.

Ott calls for ‘real comprehensive tax reform’

Sort of following up on the subject of my last post, I share this release that came in a few minutes ago:

Ott Calls for Real Comprehensive Tax Reform

Columbia, SC – House Democrats voted against a Republican plan on Thursday that raised sales taxes by over $12 million on parks, energy efficient home products, postage, zoos, trains, and cargo vessels as well as many others. Minority Leader Harry Ott released the following statement in response to the vote:

“House Democrats have been advocating for comprehensive tax reform for over ten years. This is not even close to tax reform. These are tax increases. Raising taxes is the last thing we should be doing in this economy. This bill doesn’t even begin to address the real problems with our flawed tax code in South Carolina. This was simply a bill that was passed so that House Republicans could go home and say they voted for tax reform. It’s time to stop playing politics and pass real comprehensive tax reform.”

####

Oh, yeah, Democrats? Well, I’ve been calling for comprehensive tax reform for more than 20 years, so don’t be putting on airs. (And even though I still haven’t gotten what I’ve pushed for, my calling for it is just as meaningful as you calling for it, because Democrats in the House don’t have a snowball’s chance of affecting that body’s agenda, especially not on anything this big.)

But you’re right. In all that time, I’ve never seen anything that looked like it actually come close to passage.

In fairness to you Dems, I will say that the closest we did come was when then-Ways and Means Chair Billy Boan led a study group that came up with a pretty good report after the legislative session of 1994, making proposals that would indeed have looked like comprehensive reform.

But before lawmakers could come back in January 1995, the Republicans had taken over the House, and all they wanted to do to taxes was cut them and cut them some more, with no thought given to the overall system.

Consequently, while there have been a number of special committees charged with drafting comprehensive reform since then (but none that looked as good as what Boan’s group came up with), they have all died before getting very far in the process.

And thanks to legislative tinkering here and there (pretty much all of them cuts aimed at pandering to this or that constituency, rather than trying to come up with a smarter and fairer system), our tax system is far, FAR more out of whack than it was when I started calling for reform. Termites have chewed through two, and to a certain extent all three, of the legs of the stool.

Cindi keeps pushing that ol’ Truth Rock up the hill

Anyone who would like a refreshing change from the utter nonsense we hear so often from the majority over at the State House should read Cindi Scoppe’s column today.

In it she reiterates irrefutable truths that fly completely in the face of the way so many of our pols describe reality.

Over and over again, we hear the people who call themselves “conservatives” railing against all those awful people who keep wanting to raise your taxes. When of course, raising taxes is the least likely thing one could expect from the General Assembly.

Such folks, in arguing that we should adopt their latest pet plan for doing what SC lawmakers love most to do — cut taxes — frequently make like the choice is between their plan and tax increases. Which is laughable.

Excerpts:

I moved to South Carolina in the fall of 1987, a few months after the Legislature raised the gas tax by 3 cents per gallon. It didn’t raise taxes again the next year. Or the next. Or the next 17 after that.

The Legislature didn’t raise taxes again until 2006, and then only as part of a swap that reduced taxes even more, increasing the sales tax by a penny in order to eliminate homeowner property taxes for school operations. And the extra penny hasn’t generated as much money as lawmakers projected, so next year they’ll have to send an extra $118 million in general tax revenues to the schools to make up for the shortfall. That is, they’ll divert $118 million from other spending in order to pay for the tax cut that was supposed to have been offset by a tax increase.

Lawmakers also have increased various fees and raised court fines — all of which take more money out of taxpayers’ pockets but can be avoided by not breaking the law or using fee-based services.

In 2010, the Legislature increased unemployment-insurance assessments by $150 million a year, to support a program that is by law supposed to be self-sustaining. It wasn’t self-sustaining — the state had borrowed nearly $1 billion to pay out unemployment claims — in large part because the Legislature had slashed businesses’ assessments before the recession. (In 2011, the Legislature appropriated $146 million to essentially pay the businesses’ higher assessments for them; this year the House has appropriated $77 million for the same purpose.)…

Also in 2010, the Legislature increased the cigarette tax from 7 cents to 57 cents per pack. This $115 million tax increase came after a decade-long campaign by public-health advocates such as myself who wanted to decrease teen smoking. Even with the increase, the tax remains the ninth-lowest in the nation. Still, this was a real, honest-to-goodness, raise-more-money tax increase.

The only one our Legislature has passed in the past quarter century.

Over those same 25 years, the Legislature has eliminated the sales tax on groceries, a $400 million-a-year tax cut.

It has eliminated homeowners’ school property taxes. That’s worth about $970 million per year, but the sales tax brings in $550 million a year, so the net tax cut is $420 million per year.

It has increased the homestead exemption for senior citizens’ local government property taxes from $20,000 to $50,000. Another $100 million per year.

It has indexed income tax brackets to inflation, saving taxpayers $390 million per year.

It has eliminated the bottom income tax bracket, reducing individual income taxes for everyone and eliminating them for many. That’s worth $90 million per year.

It has reduced the top income tax rate for most small businesses from 7 percent to 5 percent, saving $130 million per year.

And it has handed out at least 39 more sales tax exemptions — ranging in size from $4,000 to $47 million. And more income tax breaks.

According to the Board of Economic Advisors, the tax cuts enacted just since 1991 were worth $2.3 billion in 2009. The tax increases over that same period totaled either $665 million or $815 million, depending on whether you count the unemployment-insurance increase that businesses haven’t had to pay. That’s a net tax cut of at least $1.5 billion per year.

As a result of all these changes, the portion of our income that South Carolinians pay in sales taxes has dropped from about 2.8 percent when I moved here in 1987 to 2.2 percent today. Even as the sales tax rate was increased from 5 percent to 6 percent. Going from 2.8 percent to 2.2 percent might not sound like much, but it’s a 21 percent reduction…

Actually, you should just go read the whole piece. It’s chock-full of simple, obvious facts of which the people who run our state seem to be completely unaware.

Stiff upper lip, mate: Coping with austerity in Britain

On a previous post, Bud and Silence had an exchange about Britain’s austerity measures, with Bud painting a fairly dismal picture:

Check out the results of the austerity approach in Great Britain. It’s been a disaster with GDP declining a full 2 years after the US began to grow. They’re approach a full blown depression.

Well, I don’t know about all that, but I do know that when I was there at the start of last year, all the buzz was about the steep increase in the VAT, which took effect while I was there. Everywhere I went, businesses had signs out about sales and such that appealed to people’s worries about the tax increase. The newspapers were full of back-and-forth between Labour pols attacking the increase and Tories defending it.

Personally, I didn’t notice the difference — everything was a little more expensive over there than here before the increase, and I didn’t feel a few more few bob here and there. Besides, when you’re on vacation you don’t count pennies the same way — especially since pennies there are different from here to start with.

I did appreciate the sign in front of The Crown Inn in Woodstock (a short bus ride from Oxford). We went in and had lunch, and I enjoyed a couple of VAT-increase-free pints. But then, I would have anyway. It was (we were told) the oldest pub in town, and we got a nice table next to the fireplace. Cheers!

Mr. Speaker, that’s not tax reform. That’s legislative business as usual in South Carolina…

SC House Speaker Bobby Harrell addresses the Columbia Rotary Club Monday. At far left is Joel Sawyer, who introduced him. It struck me as ironic for Mark Sanford's former press secretary to introduce the former governor's nemesis.

Trying to remember how long I’ve been pushing for comprehensive tax reform in South Carolina. It’s at least two decades. Maybe a year or two past that.

The eerie thing about it is that almost every politician I’ve talked to during that period, especially those running for office, have earnestly assured me that they’re all for it. But somehow, it never happens.

Many, many committees and blue-ribbon panels have been set to coming up with a plan that will be rational, equitable, and adequate to meeting the state’s revenue needs. And all have either wandered off into a swamp somewhere, never to be heard from, or have filed plans that have promptly been dumped in the trash. And whenever enough of a hue and cry arises — such as the one from business leaders over the execrable Act 388 — lawmakers have sworn to deal with it, and appointed another panel to study the matter yet again, etc.

Speaker Bobby Harrell has apparently decided to end the farce by abandoning the concept of comprehensive tax reform altogether.

That’s the gist of what he told us at Rotary yesterday.

He said that when you try to get rid of all the irrational bits of our tax code — such as the $300 ceiling on the automobile sales tax, or the tangle of other exemptions that lead us to exempt more in sales tax than is actually paid — then everybody comes out of the woodwork and opposes you, and you fail.

So he proposes to pass bits and pieces of reform. On the grounds that that’s doable.

Which means, in South Carolina, business as usual. Because that’s what our lawmakers always do — pass a new law affecting some small piece (or for that matter, large piece) of our overall tax system, with little regard for how it affects other parts. So we get, for instance, multiple “reforms” that essentially remove the burden of supporting public school operations entirely from the backs of homeowners (that is to say, on the home that they live in), which means that businesses — including owners of rental property — are forced to pay much more in property taxes to make up the difference.

At least on the most recent such massive shift, some of the burden was put on the sales tax — which is now too high, really, especially considering that we don’t tax everything, or even close to everything, meaning that the things we do tax are taxes disproportionately. Which is not fair; nor is it a sustainable way to finance government.

So here’s what’s going to happen, based on knowing the guys who have been running the General Assembly (and especially the House) since I’ve been watching them (and no, Doug, term limits are not the answer, because if anything newer members have a greater propensity to do this, in my experience — largely because of their greater ignorance of the effects of what they do)…

We’ll see bills to cut more taxes, narrowly defined aimed at whichever categories of taxpayers are hollering the loudest at a given moment. And most likely, nothing will be done elsewhere in the tax code to offset that hole in the general fund. Or if something is done, it won’t be sustainable, and/or will create a new injustice that will later be addressed by more piecemeal “reform.”

What should happen instead? The following:

  1. Lawmakers should figure out, from scratch, what state government needs to do (build roads, run schools, enforce laws, keep air and water clean, etc.).
  2. They should then determine what it will cost to do those things.
  3. They should devise a tax system for raising that amount that is rational, fair, and sustainable. One that places no more restriction on economic activity than absolutely necessary, with the burden spread as widely as possible, and yet raises the needed amount reliably, with a minimum of peaks and valleys.

That’s what should happen. It is lawmakers’ duty to make those things happen. Because snipping here and putting on a patch there has never worked.

How many times have I written that now? I don’t know. Lots and lots…

Have you received your Amazon tax notice?

I have, one week after the Amazon guy came to speak to Rotary (sorry, last week was so busy I didn’t write about it).

I’m pretty sure this is the first one of these I’ve received. But then, I just recently got into ordering stuff from Amazon. Here’s what it says:

Hello from Amazon.com,

As you may or may not be aware Amazon.com LLC is not required to collect sales or use taxes in all states, including the state of South Carolina.

The South Carolina Department of Revenue requires us to provide the following notice to you:

You may owe South Carolina use tax on purchases you made from Amazon.com LLC during the previous calendar year. The amount of tax you may owe is based on the total sales price of the items you purchased during the previous calendar year. The total sales price of only purchases you had shipped to South Carolina in 2011 was $118.96. This is the amount that you may include on your South Carolina income tax return to calculate the appropriate use tax owed unless you have already paid the tax.While Amazon.com LLC does not report this information directly to the state of South Carolina we are required to provide this information to you based on South Carolina law Section 12-36-2691(E)(3).

As purchases from Amazon.com LLC can be made through various sales channels, we have included directly below your breakdown of purchases from the various channels.

Total sales from www.amazon.com $118.96

Please note the following:

  • The total sales represent all orders that were shipped to South Carolina during 2011.
  • Your purchases are subject to use tax unless an exemption exists under state law or you have already paid the tax.
  • A sale is not exempt under state law because it is made through the internet.
  • This information should not be used for any federal income tax reporting purposes.
  • We are required to provide this notice in accordance with South Carolina law Section 12-36-2691(E)(3).
  • Notifications were sent to customers that had purchases delivered to South Carolina. If you are not a resident of South Carolina, the most common reason for receiving this notification is that you may have sent a gift to a recipient in the state.

In addition, the South Carolina Department of Revenue requires us to provide you with the following links that you can use to get more information and pay any taxes due:

Use Tax Page: http://www.sctax.org/Tax+Information/Sales+and+Use+Tax/use_tax/UseTaxHome.htm

How Do I Pay my Bill: http://www.sctax.org/Tax+Information/Sales+and+Use+Tax/use_tax/UseTax+Payment.htm

For more information you may also view our South Carolina Use Tax Notification Page at:
http://www.amazon.com/gp/help/customer/display.html/?nodeId=200863730

Sincerely,

Customer Service
Amazon.com

Something else to give my accountant when we get ready to do our taxes…