Category Archives: Taxes

Yeah, we know. That’s why we can’t afford basic government services. Not news.

The SC Senate Republican Caucus is bragging on how terrific it is that people hardly have to pay any taxes to support state government in South Carolina. Great job they’re doin’ ain’t it?

The thing is, that’s not news to anyone except the out-of-touch people who go around complaining about how high taxes are in SC, based on nothing. (And really believe it, too.) Actually, last I heard we were the lowest, not second-lowest.

Here’s the best part — this was sent out as a fund-raiser. The email that brought it to my attention gave me a choice of two things to click on: “View full image,” or “Donate now.” Because, you know, I’m supposed to be so thrilled that state taxes are so low, so eager to donate to elect people to make my taxes even lower, that I might not even have the patience to go look at the full image before I write my check.

I will never understand the mentality that will cause someone to shell out money — sometimes millions, in the case of a guy like Howard Rich — in order to avoid paying the same money in taxes. I mean, if I were so in love with my money that I passionately hated paying taxes, I wouldn’t want to pay it to politicians, either. Why would anyone hate the idea of his money being spent on public services so much that he’d rather it go to enrich political consultants?

But that odd world view exists. No doubt about it. Which is why pitches like this work — against all logic.

Wow, he actually did say it. He actually did say he should not be taxed on that leftover $400,000

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At first, I thought nobody would be as stupid as to actually complain about the idea of increased taxes by saying that he, personally, only had $400,000 left over after “feeding his family” and paying his taxes.

And indeed, when I watched the interview with this Tea Party guy John Fleming, I thought for a moment that I was right, that he was actually saying something different. I thought he was saying that he was talking about money he needed to invest in his business and create jobs.

But then… the guy has $400,000 left out of a $6 million business after he has paid all of his business’ operating expenses and his personal and business taxes and met his family’s needs? Really?

This isn’t a Silicon Valley entrepreneur from the late ’90s. He’s not exploring exciting new ways to transform our economy. Nor is he producing high-paying jobs with futures. This guy owns Subway franchises.

So you’re saying, you can’t contribute to paying down the deficit because it might… hamper your ability to open another Subway every year or so? And your failure to do that is going to kill the economy?

I suppose you could argue that he’s right. I could mount such an argument if forced to. But not even I would be persuaded.

Actually, was he even saying that? Since he is deliberately mingling his business revenues with personal income, it’s confusing. But another way to look at it is that he takes home $600,000, which seems to be a whopping 10 percent of his businesses’ total revenues. And then he seems to say that his family’s needs are fully met with one-third of that, and I suppose that’s true. A family could, just maybe, scrape by on 200k a year if they were really careful.

And then he’s got $400,000 left over. He’s making out like this is his businesses’ money rather than his money, but then he is deliberately confusing the two.

It just gets worse and worse…

Trey Gowdy’s performance at Rotary Monday

On the whole, it was good. He was well-received. Probably more so than Nikki Haley was a few weeks back, and she did pretty well also.

He certainly struck me — and to a much greater extent seemed to strike others — as a far, far more reasonable guy than the one who ran to the far right of Bob Inglis and eviscerated him in last year’s primary. It’s hard to explain to you why that was such a big deal unless you already understand. I had enough trouble finding time to write this post without taking time to go over the last 19 years.

But briefly: Bob Inglis shocked political observers across the state when he came out of nowhere to beat the Democratic incumbent in 1992. Scribes had to make excuses to their editors for why they hadn’t seen it coming. A favorite that I heard was “He cheated. He didn’t run a conventional campaign. He ran underground, through the churches.” Inglis was the prototype of two separate waves of revolution on the right that didn’t fully break until two years later. He was a new-wave religious conservative two years before David Beasley shocked the Republican establishment with the rise of that faction. (And boy, did the country club crowd sneer at the Bible-thumpers at the time!) But more to the point, he came along two years before the Class of 1994, and showed us a kind of fiscal conservatism that was not only rare, but unprecedented.

I had thought he was just another rhetorical fiscal conservative until, shortly after being elected, he did something I’d never seen one of them do: He voted against federal highway money for South Carolina, for his own constituents. Whoa, I thought. This guy’s actually for real. He continued in that vein. He term-limited himself after three terms. Then, after failing to beat Fritz Hollings (who called Inglis a “goddamn skunk”), he sat out for a bit and then came back. He came back as the same unique sort of conservative he’d always been. Inglis had always acted out of his own beliefs and conclusions, not because he was taking orders from any party or movement.

And that was his undoing. He always asked himself what was right, rather than what a faction demanded of him. And so it was that he favored a carbon tax. And voted (wrongly, but I respect his conscience on the matter) against the Iraq Surge. And was one of only seven Republicans to vote to reprove Joe Wilson for his outburst.

And for that Trey Gowdy crushed him in the primary last year. So I was very curious to see the kind of guy who could run that way to the right of Bob Inglis (from the Gowdy campaign website: “Inglis the Most Liberal Congressman of SC Republicans”), of all people — the guy with the 93.5% lifetime rating from the American Conservative Union. What kind of guy could accuse Bob Inglis of “hypocrisy” for chastising Joe?

The new look for Congress.

The Trey Gowdy I saw Monday is an interesting guy on a number of levels. I had never seen him before, and my eye ran right over him at first, as someone who could not be our speaker. For instance, he apparently does not own a comb. He appeared before the largest Rotary in the state without a tie, and with his hair looking the way mine looks only on Saturdays if I don’t take a shower first thing — not only disheveled, but matted from the pillow. (Others tell me it always looks like that, and evidence seems to support them.) If I go out like that, I wear a hat. He also evoked Saturday by the fact that he had not shaved that day. I kept thinking that was an optical illusion, that the light was just glinting off his chin in a funny way — until I saw him up close, and knew for sure that he had not shaved that day, if the day before.

He was going all-out to show that he was a different kind of congressman. Old-school Joe Wilson was there, and I tried to imagine him showing up to speak even to the smallest Rotary in the state in such a state of disarray. Impossible. Joe might get wild and crazy for two seconds once a career, but that’s about it. He’s a grownup, and Daddy shaves on weekdays.

So immediately, without saying a word, Mr. Gowdy projects: Not what you expected to see.

And then he shifts and does the conventional thing: He makes a number of disarming remarks to begin, such as praising Joe for being the father of four sons who have served in uniform, and saying things such as this: “I will promise each of you, you will disagree with at least one thing I say today. Some of you with everything that I say today. And that is absolutely fantastic.” That made some Rotarians chuckle with appreciation, but I wasn’t laughing. I knew this was a guy who needed to say things like that, because of how he got here.

And he said them, and he said them well. He ably presented the indisputable facts about the spending hole we’re in in this country — and to his credit presented them not as challenges to those horrible people on the other side of the aisle, but as things that everyone, left and right, stipulated as fact. To give you the benefit of his Powerpoint presentation, I got it from his staffer who was there. She had a bit of trouble emailing it, and broke it into three parts: this one, and then this one, and then this one. I hope you can view the slides. It’s hard for me to tell since I don’t have that application on this machine — except for a viewer, which may not work the same as the full software.

He preceded his slide show with another statement that I appreciated: “These are not Republican numbers, these aren’t Democrat (sic) numbers, these aren’t Tea Party numbers, these aren’t independent numbers, these are the numbers. If Chris von Holland, who was the ranking member of the Budget Committee and a Democrat were here, he would not take issue with any of these numbers.”

OK, point taken. And appreciated. I found little to dispute in what he said. And that was actually one of the main points he strove to make on Monday: That there really isn’t as much disagreement as you might think. It was good to hear.

All of which makes you wonder why, from afar, it seems no one can agree on anything. And there’s the rub. Mr. Gowdy stayed away from the kind of stuff that might have helped explain that — the kind of stuff that got him elected (that is, got him nominated, which where he lives is the same as elected), or that drew such national attention to the “SC5.”

And as it happened, my mind started to focus on those gaps. Several times in his speech or in answering questions, he would say something ingratiating and charming, something that was engaging and charming because it left certain pertinent details out. Here are a few examples:

  • He repeatedly said he had nothing against addressing taxes, that he and everyone else was for “tax reform.” But he said, suppose you let the Bush tax cuts expire. That would only give you $92 million a day in new revenue, when we borrow $4.7 billion a day. And then he moved on — without addressing why he wouldn’t go ahead and drop the tax cuts anyway. Why not? Why not put yourself on the high ground and make it possible for a grand bargain to be made? Especially when the taxes thus levied are not all that great, as you say. But he moved on without explaining that, except for a passing remark that he knew guys who would gladly let the Bush cuts expire in exchange for a Balance Budget Amendment. He said that as though it were a natural trade, as though such an absolutist change to the constitution itself were a concession no greater than itty-bitty (in his estimation) tax cuts to expire as they were scheduled to do. As though that were an even swap…
  • “I’ll commit to tax reform if everybody will commit to fiscal reform.” Really? Well then, please explain to me exactly who in Washington, what significant faction, came to the table refusing to cut spending. Everybody was willing to cut spending. And if you had given a little on taxes, you could have pushed them to cut more spending, so hungry were certain parties (such as the president, whose re-election seems in trouble) for a Grand Bargain. But he did not explain that discrepancy.
  • He was asked (by Julian Fowler) why, if everyone agreed in private on the basic facts as he said, why did Congress treat “compromise” as a dirty word? “I think you will see compromise in the last term of most people’s political careers. And I say that with a sad heart, to be honest with you. Primary politics is, um, is different from general election politics. That’s just a fact.” Really? Really? It makes you said that you nailed Bob Inglis’ hide to the wall for daring to compromise, to think for himself, for occasionally even voting with the other side when his conscience demanded? Yep, that kind of thing is indeed… different. A moment later he said, “I don’t like to vilify people.” Really?

There were other things that, in the kind of editorial board meetings I was accustomed to in my previous life, would have caused me to say, “Wait a minute,” and seek an explanation. (And, I suspect, Mr. Gowdy would have been able to provide satisfactory ones in some cases.) But the Rotarians Monday were not raising such objections. Listeners to speeches seldom do. Most people want to like the guy in front of them, especially when he puts himself out to be liked. And they liked Trey Gowdy. Two Rotarians thanked him for giving it to them straight, “without political spin.”

I liked him, too. But sometime I want to sit down with him and dig into a few of those omissions.

Pelosi picks Clyburn for supercommittee

Apparently, Jim Clyburn is still the former speaker’s go-to guy:

House Minority Leader Nancy Pelosi on Thursday filled out the final three slots on the joint deficit committee by selecting three members of her leadership team to the panel.

Pelosi (D-Calif.) chose Reps. James E. Clyburn (D-S.C.), Xavier Becerra (D-Calif.) and Chris Van Hollen (D-Md.), giving the panel the highest-ranking African-American and Latino lawmakers in Congress with Clyburn and Becerra, respectively. Pelosi reiterated her call for Congress to consider “the grand bargain” of major entitlement cuts matched with increased taxes…

I don’t know what all that means, except that it would appear that in recent years it seems to have fallen to Rep. Clyburn to try, singlehandedly, to balance out the rightward tilt of our congressional delegation. For what that’s worth. Which, in South Carolina, as about as much as those T-shirts.

By the way, who started calling it “supercommittee?” And if it’s called that, how come Thor, Green Lantern, the X-men and Captain America aren’t on it?

Well, that’s good to hear — sorta, kinda

Just got this from the state Treasurer:

CREDIT RATING AGENCY MOODY’S REAFFIRMS SOUTH CAROLINA’S AAA CREDIT RATING

Rating agency’s negative outlook for US economy could impact South Carolina

(Columbia, SC) – State Treasurer Curtis Loftis issued the following statement in response to the action taken by credit rating agency Moody’s, who has reaffirmed South Carolina’s AAA credit rating but added a negative outlook similar to that given to the federal government.

“South Carolina has AAA credit for a reason,” Treasurer Loftis said.  “We live within our means and are constantly guided by sound financial principles. The negative outlook for the federal government has spilled over to the states and is a wake-up call that government must not spend more than it has.  The State Treasurer’s Office is monitoring this situation and is in constant contact with the rating agencies.”

South Carolina’s AAA credit rating means it costs less to borrow money for things taxpayers depend on like schools, roads and bridges.

Moody’s Investors Service will be conducting a credit review of select states including South Carolina within the next 90 days.  According to Moody’s, in order for South Carolina to earn a stable outlook, the state must maintain credit quality higher than that of the federal government in the event the U. S. government credit would be downgraded.

“The bottom line is simple: the action by Congress and the President causes uncertainty in the business community,” Treasurer Loftis said.  “We must demand fiscal conservatism and transparency from Washington.  South Carolina is doing its part and I ask D. C. to do the same.”

South Carolina, along with Maryland, New Mexico, Tennessee and the Commonwealth of Virginia, are the five states Moody’s confirmed AAA with negative outlooks with ratings indirectly linked to the U. S. government.  Those five states have a combined $24 billion of outstanding debt.

WEB/TV/RADIO: Click Here for a downloadable soundbite (.mpg) of the Treasurer on the debt issue.

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Well, that’s good to hear. Because I was worried about the credit agencies not being pleased with the debt deal signed earlier in the week. (Hey, neither I nor anyone else was happy with it; why should they be?)

All along, the word had been that the credit rating was endangered less by the debt ceiling deadline, and more by the failure of the gummint to come to terms with the deficit. Which they still haven’t done, of course. But let’s embrace whatever good news we can get.

Yo, and stock markets… Please settle down, as I said this morning:

So calm down, already! Stock market, this means you: “@nytimes: NYT NEWS ALERT: U.S. Economy Added 117,000 Jobs in July; Rate Falls to 9.1%”

The big picture for Amazon

South Carolina hardly rates a mention in this report in the WSJ today (“Amazon Battles States Over Sales Tax“), but I thought some of y’all, your nerves still jangled from the recent battle at the State House, might be interested in this step-back report on what was at stake for Amazon, and how SC fits into the company’s grand strategy. An excerpt:

SEATTLE — Amazon.com Inc., the world’s largest online retailer, hasn’t charged sales tax in most states since its founding in 1994. And it has taken some extreme measures to keep it that way.

Among them: Staff traveling around the U.S. have been required to first consult a company map that shades each state red, yellow or green, said three people who have worked for the retailer. These people said they needed permission from managers or company lawyers before entering “red” states because a worker’s actions might trigger laws that force Amazon to collect taxes in those states.

Such steps to avoid local levies allow Amazon to undercut in-state retailers by the amount they must add in sales tax, which can exceed 8%.

A close examination of Amazon’s corporate practices, based on interviews with more than a dozen former employees and people who have done business with the Seattle company, as well as a review of corporate documents, indicates that the company believes its sales-tax policy is critical to its performance…

Burnie gives it to us straight

Speaking of Rotary — which I was a moment ago — we had a nice surprise today. It was preceded by this emailed notice, which I did not see until just now, about our main speaker:

Congressman Trey Gowdy is stuck in Washington dealing with the nation’s debt limit, and has been re-scheduled.  Instead, our own Burnie Maybank will give a surprise presentation.

I repressed the urge, during the meeting, to Tweet out that he might as well be here, since he wasn’t contributing anything there. Sometimes I am a model of self-restraint.

Burnet Maybank, for those of you who have been away from South Carolina for the last 112 years, is the name of three key figures in S.C. government. The first was governor from 1939-41, and U.S. senator from 1941-54. The second was lieutenant governor from 1959-63.

But we concern ourselves with the current one, Burnet Maybank III, a.k.a. “Burnie.” He was head of the Department of Revenue under Govs. Beasley and Sanford. But he wasn’t just a guy who sat around waiting for the money to come in. He is known for having said to the folks at the State House, give me some money for enforcement, and I’ll bring in far more than that by getting people not currently paying their taxes to pay them. The Legislature went for that, and as recently as this year, a portion of the state budget discussion has dealt with how to spend the “Maybank money.”

There’s no nonsense to Burnie. And he gave a no-nonsense presentation to Rotary today. I doubt he had to prepare much. He got up and talked about what he knows — S.C. taxes, and in particular the crying need for comprehensive tax reform. I had of course heard a lot of it before, having worked for two decades with Cindi Scoppe — whom Burnie cited at one point during his presentation. But I started writing down some highlights of what he said. Unfortunately, I didn’t get far before my pen actually ran out of ink. Here’s what I got:

  • We have a relatively low tax burden in this state.
  • But it is a tax system that is “a product of hideous extremes.” For instance, we levy the highest property taxes in the nation on manufacturers, and the lowest property taxes in the nation on owner-occupied homes.
  • We exempt more in sales taxes than we collect.
  • The annual cost of the absurd cap on the sales tax on automobiles is $173 million. (Burnie gave a brief history of that tax. He said it was one thing when lawmakers came up with this cap to help auto dealers compete with a similar cap in North Carolina. But then the lobbyists went to work, and started exempting a long list of other items, including aircraft… that’s when my pen started running out of ink. But I did manage to write legibly on of the more ridiculous-sounding ones — “light construction equipment,” but only self-propelled light construction equipment.)
  • The fact that 45 percent of people in the U.S. who file returns pay no federal income tax. (Doug likes to say 50 percent, but it’s 45.) He mentioned that to make this point: Grover Norquist is seen as the champion of the wealthy in his opposition to new taxes. But in fact, the beneficiaries of his standing in the way of tax reform is the 45 percent who now pay nothing.

That’s about all I got. But you can always learn more by reading Cindi’s work, or by following Burnie’s advice and going to look at the report of the S.C. Tax Realignment Commission (TRAC). Reading that isn’t as much fun as hearing Burnie talk about it, but it’s something…

What McCain had to say about the “hobbits” who are precipitating this crisis

You may have heard about John McCain’s speech excoriating the likes of the South Carolina delegation, and the Tea Party in general. Here’s the full text. Here’s an excerpt:

I will take a backseat to none in my support of the balanced budget amendment to the Constitution. I have voted for it 13 times. I will vote for it tomorrow. What is amazing about this is, some Members are believing we can pass a balanced budget amendment to the Constitution in this body with its present representation, and that is foolish. That is worse than foolish. That is deceiving many of our constituents by telling them that just because the majority leader tabled the balanced budget amendment legislation that, through amending and debate, we could somehow convince the majority on the other side of the aisle to go along with a balanced budget amendment to the Constitution. That is not fair. That is not fair to the American people to hold out and say we will not agree to raising the debt limit until we pass a balanced budget amendment to the Constitution. It is unfair. It is bizarro. Maybe some people who have only been in this body for 6 or 7 months or so believe that. Others know better. Others know better.

I especially like the way he ended it:

It is time we listened to the markets. It is time we listened to our constituents. Most of all, it is time we listened to the American people and sit down and seriously negotiate something before we face a situation where we are depriving the American people of the fundamental right of having a government that doesn’t deprive them of the essential services, goods, and entitlements which they have earned.

Oh, and in case you wondered where the “hobbits” part come in. That was from when McCain was quoting from this piece in the WSJ. An excerpt from that:

The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor.

Slouching toward history’s first intentional Great Depression

We’ve been here before, back in the late ’20s and throughout the ’30s. But this time, we’re going to do it on purpose.

There’s blame to go around, in the long view. The Democrats did their bit leading us up to this point, but they’ve been offering compromises lately, and occasionally even making sense. Here in the home stretch, most of the “credit” for a crash will belong to the Republicans and their Kool-Aid-drinking — I mean Tea-drinking — friends.

Yesterday, the five Republican members of South Carolina’s congressional delegation “distinguished” themselves by being the most obstinate state bloc in the GOP caucus. Not that the Boehner plan was anything to write home about, or anything likely to get us toward a resolution. Today, I see that Boehner’s doing better among his caucus, but for all I know, our guys are still firing on Fort Sumter. (Anybody see an update on the SC part? I haven’t yet.)

But after all the tears and folderol in the House, whatever they pass will be DOA in the Senate, where Reid has a plan of his own. I fail to see how these two plans lead us to an actual solution before Tuesday.

And here’s the thing, folks — it’s not good enough to raise the debt limit. The ratings agencies will still probably downgrade the nation’s (AND South Carolina’s) credit rating, which will likely take our already staggering economy (did I mention that the newspaper company that laid me off two years ago just posted a 2nd-quarter loss of 32 percent?), and knock it right down onto the mat. UNLESS we take serious steps toward getting the deficits under control. And that’s WAY harder than just raising the ceiling.

You’d think — what with the fact that about the only thing our state’s leaders have had to brag about for the last 20 years has been our vaunted AAA rating — that the SC delegation would want to do something positive toward averting this disaster, wouldn’t you? Well, so far, you’d be wrong.

You know what happened in the U.K. after the Conservatives — the real conservatives, not these ruffians over here who take pride in throwing the Tories’ tea into the harbor — took over the government? They cut spending, and raised taxes. I was there when the taxes went up (see, “The terrible, awful, horrible day that the VAT went up,” Jan. 4) Far as I know, England is still there. Scotland, too. Maybe even Wales, and Northern Ireland.

Nobody wants to raise taxes at a time like this. It can have a cooling effect. Nor does a sensible person want to see drastic spending cuts, which can do the same. But the alternative to doing both looks considerably worse at the moment. And wanting to do one without the other — no, insisting upon doing one without the other, no matter what — is a form of madness.

Just something to think about, guys. Here at the last minute.

All right. OK. Here’s a post about the stupid debt “debate”

Kept hoping — against hope, of course — this debt thing would get resolved before I had to say something about it. I’ve had observations to make about it along the way, but just haven’t wanted to get into it. I hate the subject; it bores me to tears. But it also makes me angry. Part of the anger is over the substance, of course. But part of it is that they’re making me think about this stuff. This is why we have representative democracy, you see. We elect people to go off and handle this stuff and make sure they don’t drive the country onto the rocks — and NOT bother us with the excruciating details.

They’re not getting the job done. Part of the reason, of course, is that there are a bunch of people in the House — the Tea Party guys — who don’t get what the responsibility of public office is all about. They think their bumper stickers slogans, the things that got them elected, are reality, and don’t understand that the world is more complicated than the concepts that got them elected. Unfortunately, they also have a certain cognitive block from ever learning they are wrong. Most people go into elective office with all sorts of misconceptions and foolish ideas. Most, whether they are “liberal” or “conservative,” realize with experience that there are broader responsibilities to the country (and in this case, to the entire world, since the already-weakened worldwide economy is poised to go over the brink with us). It’s not just about how they and their constituents feel about things, and unfortunately they have very powerful resistance to learning, ever, how wrong they are.

Part of the problem is that a significant part of their ideology involves rejection of the idea that experience is valuable. This is a common populist fallacy, of course, but it’s particularly malignant in this case, in terms of its effect on the world. People who go to Washington — or Columbia, or wherever — and study issues and come to understandings different from the prejudices they had originally… are considered sellouts, under this ideology. Such people who embrace larger responsibilities are not wiser in this view; they are corrupted.

Another obstacle is that this ideology is particularly nihilistic toward what happens to the world at large, as long as the ideology is served.

This makes it very dangerous for people with such a worldview to hold office. Oh, it’s not so bad to have one or two of these anti-Mr. Smiths at the table (Mr. Smith went to Washington to make the world a better place; these guys go to Washington to tell the world to go to hell). Unfortunately, the party that now holds a momentary (and at my age, I consider two-year cycles to be “momentary”) majority in the House knows that it holds that tenuous power because of the knot of such people in its midst. And is held hostage by it.

Speaking of “hostage,” did you see that performance by Boehner last night? He was like the prisoner forced to recite the propaganda with an AK-47 pointed at his head just off-camera. The only think lacking in his performance was the blinked Morse code (or maybe it was there; I don’t read Morse) saying “I don’t really believe this stuff; I just have to say it.” But his tone and body language did that. The performance brought to mind all those meetings I read about in which Boehner was the Soviet commanding officer caught in the middle, trying to do the right thing, and Eric Cantor was the sneering zampolit, ready to report him to the Central Committee for the slightest lack of revolutionary zeal.

Obama, by contrast, was more convincing last night. Part of that was pure talent. I’m not accustomed to watching Boehner, but I doubt that he’s nearly the orator Obama is. Almost no one is, particularly at communicating sober conviction.

I heard some commentary on the radio (NPR) this morning that said neither man gave America what it wanted last night — a way out — but simply acted as apologist for his own side’s position.

I suppose that’s true. But Obama’s position is the defensible one. He wants cuts and revenue increases, which is what a rational person who is not blinded by ideology would choose. Neither is what said rational person would want. Until the economy is ticking along a lot more strongly, both spending cuts and tax increases could have a chilling effect.

But here’s the thing: NOT getting control of our mounting debt, under these circumstances, would have a much worse effect. It’s not just about raising the debt ceiling. If you do that, and don’t reduce the gap between spending and revenue, we’re still likely to have a devastating downgrade of the nation’s credit rating. And we can’t afford that.

To let one’s natural reluctance to cut spending or raise taxes get in the way of dealing with that would be unconscionable. And letting a narrow ideology (particularly one that holds that it is ALWAYS right to do one and NEVER right to do the other, regardless of circumstances, which is the height of foolishness — but I guess that’s a workable definition of ideology) get in the way is much, much worse.

Things that would never occur to Jim DeMint

Cindi had a good column today on the subject of arbitrary caps and limits and pledges and the like. There are a number of good things to get out of it.

The first is the fact that Jon Huntsman is the only Republican presidential candidate who has refused to sign Jim DeMint’s Cut, Cap and Whatever pledge — which apparently irritates our junior senator no end.

Jim is all like, “I won’t support any candidate who does not support balancing the budget. … So for me, he’s out.”

Which ignores reality, of course. It doesn’t occur to Jim (or at least, he lets on that it doesn’t occur to him, on account of amassing personal political power now being the most important thing to him, judging by his actions) that a guy could be for a balanced budget amendment (which Huntsman is) and not want to kowtow to him by signing his pledge. For that matter, just to go way deeper into territory that Jim DeMint would find impossible to imagine, one can be for, very passionately for, a balanced budget — and yet not favor a constitutional amendment mandating it.

Personally, I’m ambivalent about the amendment thing. A balanced budget should be standing operating procedure, except in times of full-mobilization war and other serious emergencies. But that should be an annual decision by Congress, not a mechanism. Whether we’ve reached the point that we have to throw out that process is not yet entirely clear to me. Maybe we have. I’m just not sure.

That aside, though, there’s a bigger point here — a point even bigger than the national debt. It goes to the heart of representative democracy:

But there’s an important principle involved as well: Pledging to do or not do anything important is an abdication of elected officials’ duty to examine the issues before them and make their own decisions on behalf of their constituents. And it makes it impossible for officials to govern in a changing world. Imagine the pledges some politicians might have signed before 9/11 — and how that could have prevented them from taking necessary actions to protect our nation after the attacks “changed everything.”

Yes! Yes! YESSSS!!! (Waiter, I’ll have what he’s having…) Continuing…

When you sign away your right to consider all your options, when you are bound by uninformed opinions, when you take directions from people whose primary purpose is to maintain power and defeat those who don’t think exactly as they do, rather than taking advantage of different points of view to come up with the best solutions, then you can’t even imagine the complex solutions to our state’s interwoven ills, much less enact them.

Sounds like Cindi was listening all those years, huh? Not that she couldn’t have come up with all those thoughts on her own. Come to think of it, maybe it was me listening to her

Mayor Steve weighs in on debt debate

All day, I’ve meant to write a post about the debt battle in Washington, and haven’t found the time, and now Steve Benjamin has gotten out ahead of me. This just in:

Dear Friends,

The U.S. Capital BuildingToday I’d like to take a moment and talk with you about an issue of critical importance.

Right now, whether broadcast on our nightly news, echoing through the halls of Congress, or debated and discussed over kitchen counters and coffee tables across America, our entire country is immersed in a great conversation about budget deficits, debt limits, and our national priorities.

As Mayor, I am no stranger to this conversation. In fact, it was not that long ago that Columbia’s future was so unsure that Moody’s Investor Service assigned the city’s credit rating with a negative outlook questioning our ability to right the ship and stabilize operations.

But we took action and, by working together, we made the tough choices. We streamlined our operations. We saved taxpayers over $1 million by removing unnecessary budget vacancies. We increased oversight, installed new financial safeguards and we rewarded employees for being more efficient.

It wasn’t easy. But through hard work and sacrifice we improved our credit rating in record time and finished this fiscal year with a $3 million budget surplus.

We made the tough choices just as local governments across America have, by putting the public good ahead of political ambition. Now, with the August 2nd default deadline only weeks away, we expect our federal government to do the same.

We need to put our nation’s fiscal house in order so that we can move forward with investments in our infrastructure and communities that lay a foundation for future economic growth and prosperity.

The United States must pay its bills. Failure is not an option.

The consequence of default or delay would mean military salaries, Social Security and Medicare benefits would go unpaid while cost of our national debt would grow as would the cost of carrying that debt.

Everything from your home mortgage to your car loan and credit cards would cost more while your 401(k) and college savings account would be worth less.

Our fragile economic recovery would come to a halt and we would come face to face with the very real prospect of another recession, longer and deeper than the one before.

We cannot afford to simply kick the can down the road. We must believe in what is possible and overcome the challenges before us.

But in the midst of this challenge, I see reasons to be hopeful.

I see President Obama and Vice-President Biden working across the aisle with men like Speaker John Boehner and Senate Minority Leader Mitch McConnell to find a bipartisan solution.

I see a movement to close special interest tax loopholes so we all pay our fair share and shoulder this burden together.

I see a commitment to entitlement reform and a framework to make Medicare and Medicaid stronger and more efficient without shifting the cost of care to seniors and those with disabilities.

I see real progress being made and, beyond the shouts of hecklers and cynics, I still believe.

I still believe we can still do big things. I still believe we can make a real difference. I still believe we can overcome the challenges before us because I still believe in America.

The time to act is now. Call your Congressman and Senator today. Tell them it’s time to protect Social Security, Medicare and Medicaid. Tell them it’s time to protect our future. Tell them it’s time to stand up against the special interests and for the American people.

Tell them to act now and raise the debt ceiling before time runs out.

Sincerely,
Steve Benjamin

Good column by Warren about Jim Manning

I’ve never been a fan of Jim Manning’s short career as a Richland County councilman. In fact, on the day after the 2008 election, I saw Manning’s election as the biggest disappointment of the night. At the time, I was mostly upset that Manning had replaced an excellent incumbent, despite offering no good reasons as to why he would do a better job.It was a monument to party line voting over merit, the starkest that I saw in the 2008 election.

Mr. Manning is a nice, friendly guy, and I’ve only had pleasant interactions with him. But little that he has done since Election Night has caused me to feel better about his election.

Friday, Warren Bolton had a good column on the subject, inspired most immediately by a shocking action by Richland County Council in June:

IT SHOULDN’T come as a shock that Richland County Councilman Jim Manning insisted on raising property taxes in Richland 2 to the maximum allowed under state law against the school board’s wishes.

It’s the kind of thing for which he’s become known. While Mr. Manning characterizes himself as one who’s willing to make bold proposals and stand by them, at times his efforts are misguided, lack sound judgment and trample the tenets of good stewardship and sound policy making…

Jim Manning

Mr. Manning utterly failed to justify his action. It was apparently based in vague notions that more should be spent on education (without regard to whether there is any sort of plan for spending it). Some of you — Doug, for instance — probably think I would do just what the councilman did. I wouldn’t. Oh, I might fight for the district’s request, if it seemed justified within the context in which it was presented. But I would never dream of saying, “Oh, here’s some more money you didn’t ask for.”

Of course, the really shocking thing here is that the council went along with him on it. We wouldn’t be talking about this at all if he had not.  I don’t know all the dynamics of that; I haven’t spoken with the other council members and for some reason I don’t see the minutes of that meeting on the county website. Here are the minutes of the previous meeting, at which the matter was apparently discussed. They are a bit hard to follow. There were procedural votes that split along party lines, but in the end the vote was unanimous. Under such circumstances, I would have to have been there and heard what was said to fully understand the way it unfolded. But as Warren points out, with Mr. Manning, we have a pattern emerging:

This isn’t the first time Mr. Manning has left people scratching their heads.

He led a misguided effort to weaken the county’s smoking ban by allowing any establishment to operate “a portion of its workplace” as a “designated smoking area” if it is separate from the nonsmoking area and has its own outside entrance and a separate heating and air system; that would have required some employees to work in smoking areas. While the change was sold as an attempt to address concerns of a single bingo operator along Decker Boulevard in Mr. Manning’s district, it would have opened the door to all businesses, including bars and restaurants. The council wisely nixed the measure.

Prior to Mr. Manning taking office, County Council — worried about clutter, among other things — had banned new billboards in unincorporated areas. It later reaffirmed that stance by rebuffing attempts to expand the use of electronic billboards, which many worried would distract drivers. Once Mr. Manning joined the council, he teamed with Councilwoman Gwendolyn Kennedy to revive the electronic billboard issue and turn what once was a slim majority against them into a decided majority in favor….

Warren also cited Mr. Manning’s odd feud with County Administrator Milton Pope. He forgot one memorable incident, though — one I wrote about here, when he tried to get a high-stakes bingo on Decker Boulevard, before backing down in the face of strong community opposition (including from his own pastor).

Warren speculated that thanks to what the Council has done at Mr. Manning’s behest, “Even though it’s not at fault, Richland 2 could feel some backlash from the business community.” Oh, I think you can count on it. Since the Legislature in its “wisdom” relieved homeowners entirely from supporting school with their property taxes, the burden of supporting this whimsy falls heavily on business. And “business” in this case includes owners of rental property — which generally means rents going up for those who can’t afford to own a home.

According to Warren, Mr. Manning has a response when people criticize him, because he’s used to it:

“People have been reacting to me like that since I was in kindergarten,” he said.

I recently asked him what he meant by that.

“Kindergarten is the first time that I remember that I had to interact with an organized institution,” he said. “Ever since I’ve had to interact with organized institutions I have not toed the line.”

Set aside that he has been elected to represent real people in an organized institution. As Warren points out in the headline, this isn’t kindergarten. And nobody legitimately expects an elected official to “toe the line.” He’s there to use his best judgment in representing the people who elected him.

The key word there is “judgment.”

Warren’s column accompanied an editorial in which The State said:

Mr. Manning acknowledges that he didn’t scour the district’s budget and find holes that needed to be plugged or valuable programs that needed funding. He said district officials didn’t ask him to intervene. He also said he doesn’t care what the money is spent on; he just wants the district to have the money and is sure it will find something worthwhile to spend it on.

Richland 2 officials said they intend to spend the money forced upon them wisely, but they have gone to great pains to make it clear that they didn’t want the increased budget. Over the years, officials in the largest and fastest growing Midlands district have proven responsible and adept at handling their budget — and at asking for what’s needed to operate schools.

With the economy in the state it’s in and only businesses and automobiles being charged school operating taxes, District 2’s elected board — not unlike other conscientious elected officials — understands that keeping businesses open and people employed is crucial. So the board sought to balance the district’s needs with those of taxpaying constituents. But County Council, in its flawed wisdom and for no defensible or even clearly articulable reason, overruled the district.

Indeed.

A video interview about comprehensive tax reform

Recently, I interviewed (for Alan Cooper’s MidlandsBiz) Michael Fanning of the Olde English Consortium about the need for comprehensive tax reform in SC. It’s an old favorite cause of mine, and he speaks about it ably, so if you have ANY interest in such wonkish-but-important things, you might want to watch.

Here’s the link, in case you have trouble with the embed.

Amazon compromise appears to be a good one

I’ve sort of run out of time to go very deeply into the Amazon compromise today, but I wanted to go ahead and put up something about it…

A deal reached early today paves the way for online retailer Amazon to open a distribution center employing 2,000 people.

The state Senate agreed shortly after midnight to give the company a sales tax exemption it wants for the project, ending a two-day talkathon that opponents launched to stall the measure.

“We’ve got a deal,” Sen. Shane Massey, R-Edgefield, announced after resistance ended when all sides agreed that Amazon will send customers in South Carolina notices that sales tax is owed on purchases.

It was quickly approved on a unanimous voice vote.

Amazon’s $125 million project near Cayce would be one of the largest recent developments in the Midlands.

The agreement moves the proposal to the verge of final legislative approval. The plan approved in the Senate will need to go back to the House, which approved the deal last week. But House leaders promise to accept changes that Amazon allies have made in the measure….

Basically, I was impressed at what the lawmakers came up with. No, Amazon won’t be collecting the tax on SC sales, and I think that it should. It won’t be calculating the amount for customers, either.

But what it WILL do is notify customers of something that many seem to be unaware of now — that they most likely DO owe taxes on the purchase (the reason why it says “may owe” instead of “owe” is to step around the complication of all those exemptions we have, such as the fact that you don’t owe taxes if what you bought from Amazon was a Bible) — and point them in the direction of finding out how much, and paying it. Here’s what the amendment requires (for more, search for “Amendment No. 230” on this link:

(E)(1)   A person to whom this section applies who makes a sale through the person’s internet website shall notify a purchaser in a confirmation email that the purchaser may owe South Carolina use tax on the total sales price of the transaction and include in the email an internet link to the Department of Revenue’s website that allows the purchaser to pay the use tax. The notice must include language that is substantially similar to the following:

YOU MAY OWE SOUTH CAROLINA USE TAX ON THIS PURCHASE BASED ON THE TOTAL SALES PRICE OF THE PURCHASE. YOU MAY VISIT WWW.SCTAX.ORG TO PAY THE USE TAX OR YOU MAY REPORT AND PAY THE TAX ON YOUR SOUTH CAROLINA INCOME TAX FORM.

(2)   The Department of Revenue shall cooperate with any person to whom this section applies and provide the person with the information and assistance necessary to comply with the provisions of this subsection and the means to link to the applicable portion of the department’s website. The department shall develop the webpage required by item (1) and develop a means to allow the purchaser to pay any required tax through the webpage. The department shall include on the webpage a table of the various sales tax rates of the State by location that permits the person to calculate the tax based on the total sales price and delivery location.

(3)(a)   A person to whom this section applies shall also by February first of each year provide to each purchaser to whom tangible goods were delivered in this State a statement of the total sales made to the purchaser during the preceding calendar year. The statement must contain language substantially similar to the following:

YOU MAY OWE SOUTH CAROLINA USE TAX ON PURCHASES YOU MADE FROM US DURING THE PREVIOUS TAX YEAR. THE AMOUNT OF TAX YOU MAY OWE IS BASED ON THE TOTAL SALES PRICE OF [INSERT TOTAL SALES PRICE] THAT MUST BE REPORTED AND PAID WHEN YOU FILE YOUR SOUTH CAROLINA INCOME TAX RETURN UNLESS YOU HAVE ALREADY PAID THE TAX.

The statement must not contain any other information that would indicate, imply, or identify the class, type, description, or name of the products purchased. Any information that would indicate, imply, or identify the class, type, description, or name of the products purchased is considered strictly confidential.

That’s more than we have now. And it gets us those 2,000 (or more) jobs. That’s a good deal for South Carolina.

An idea that is, was, and always will be bad

Unfortunately, the “defund the schools” crowd was encouraged by the margin of the annual defeat of their execrable tuition-tax-credit proposal:

Nearly all lawmakers have their minds made up at this point on the topic, which repeatedly has surfaced since 2004 when school choice advocates, led by South Carolinians for Responsible Government, first introduced a school tax credit bill.

But advocates say they will continue the fight.

“We’re gaining ground every year,” said state Rep. Bill Herbkersman, R-Beaufort, a tax credit supporter. “This was the closest vote yet.”

The death knell for this year’s bill was its price tag, according to several lawmakers….

The price tag, of course, is not the reason why anyone with even the slightest sense of responsibility to South Carolina should vote against this thing. The reasons are… you know what? Never mind. I got fed up with repeating all the reasons why this is an awful idea years and years ago, really by the time I started my old blog. It’s just so totally without merit. And it’s dead for this year now, so why even bother looking up the links to when I said it all over and over before, much less repeating myself?

But I know that next year, we’ll have the whole ridiculous argument again. You know why? Two reasons:

  1. There’s a whole cottage industry of interest groups that are funded specifically to push this.
  2. The extremes of the Republican Party have begun to become the core, with recent gains by the Tea Party. Hence the close vote this time, several months after the Tea Party achieved its zenith.

So I’ll just gather up all the painfully obvious arguments against sometime between now and then. Might as well. It’s not like we’re ever going to spend serious time in the Legislature discussing anything that might actually improve the quality of education in South Carolina — like school district consolidation, or empowering principals to hire and fire freely, or merit pay.

No, we’re just going to keep having this same pointless, monotonous argument over and over, year after year. And getting nowhere.

The Second Battle of Amazon, with a different outcome

Had to type that headline three times. Fingers kept wanting to hit X instead of Z. Oh well; at least it’s easier to spell than “Manassas.”

Ever since this started heating back up last week, I’ve been meaning to do a post on it so we can discuss it. But so much has been happening that by the time I get set to react to one development, there are several more. There’s crazy buzz about it.

An hour or so ago someone Tweeted:

Reporter at Statehouse just saw Commerce Secretary Bobby Hitt come out of secret meeting with House GOPers and Gov. Haley over Amazon.

… to which I responded, “Secret?” Which drew the response, “They’re met behind closed doors. They kicked our dude out. Not illegal, just out of sight.”

Anyway, here’s the latest, from that same source:

S.C. House has reversed course and has APPROVED tax-collection exemption for Amazon.

Boy, that happened fast, didn’t it? Just goes to illustrate something I say all the time in the face of Conventional Wisdom that this or that is going to happen, or this or that will never happen in politics: Anything can happen. It’s never over. The Fat Lady can screech all she wants.

John O’Connor reports that “35 Republicans and 17 Democrats switched their Amazon vote from April 27.” And Will Folks says “@nikkihaley also told the Caucus that she would not ‘hold it against them’ if they voted for Amazon.” Nothing like leadership, huh? But all I have for you about today’s developments are these bits and pieces.

I don’t know what happens next, either, beyond it needing to go to the Senate. But I thought I’d give y’all this chance to talk about it. For fuel, here’s a recent news story about the resurrection of the debate, and here’s another and here’s another. And here’s the latest attempt by Amazon to sweeten the deal. And here’s a radio ad from opponents.

So, what do y’all think?

You’d think Amazon (or rather, its allies) could get the word out a little better

OK, I realize that Amazon itself probably isn’t involved in this. But when Former Cayce Mayor Archie Moore was quoted in the paper as a leader of the pro-Amazon group that has started running radio ads, saying “I’m not sure at this point the extent of what we’re doing,” he wasn’t kidding.

Have you heard the new radio ad? I did this morning, once, before I read the story in the paper about it. And I thought it was interesting, with it sort of halfway registering on me some things I might want to say about it, and I decided I’d listen to it again and write a post about it.

But I haven’t been able to hear it again. And now I don’t remember much about it, since I didn’t know I was supposed to memorize it from one hearing.

First, I tried to Google it, and all I found was the story in The State. Then I checked my e-mail — no releases. THREE releases from the other side, the aforementioned “South Carolina Alliance for Main Street Fairness, but nothing from the pro-Amazon group, whatever it’s called.

I e-mailed a couple of MSM types who might be in the loop more than I am, and no dice. I tried Tim Flach, who wrote the story in The State, and he said he just heard it on the radio. This is not the way it usually goes, folks.

Then, when I went out to get lunch and run some errands, I took along my little digital recorder, turned it on, and put the radio on the station I’d heard it on this morning. Or rather, the station it happened to be on, which I assume was what it was on this morning.

Nope. Although I do have a recording now of “She Blinded Me With Science,” which I hadn’t heard since the 80s.

And I thought it was ironic that an ad campaign undertaken in behalf of such a cutting-edge Web giant as Amazon would be so… technically unsophisticated. Unless this is the plan — unless it’s trying to go subliminal, and fly under media radar. I don’t know.

If I ever get to hear it again, and have notes on hand, I’ll have something to say about it. Maybe YOU have heard it enough that you can offer something in the meantime.

I do have this video from the opposition — but that’s not what this post was supposed to be about…

The gov tries to explain her (more or less correct) position on Amazon

Here’s a video Nikki Haley is touting in which she tries to explain her action/inaction on the Amazon issue.

As I said before, she’s sort of groping toward trying to do the right thing. She just has trouble articulating it.

But I agree with her that she’s in a tough spot, and Mark Sanford put her there. Hey, I can identify.

The Amazon tax break opposition gets organized

This came in a few hours ago, and I just saw it:

SC MADE NO PROMISES TO AMAZON

Issue Is About Basic Fairness To SC Citizens & Businesses

FOR IMMEDIATE RELEASE CONTACT: Brian Flynn

April 5, 2011

Columbia, SC– The state government agency that cut a controversial sales tax deal with Amazon.com admits that no promises were made to the online-only retail giant.

“We can’t make a promise,” Commerce Department spokeswoman Kara Borie told The State newspaper on Thursday regarding the deal, which was crafted to lure the company to South Carolina.

South Carolina’s agreement with Amazon only states that the Commerce Department would “use its good faith, best efforts” to persuade the legislature to exempt Amazon from sales taxes.  The agreement even maintains that the chances of such an exemption would also depend on available resources.

The South Carolina Alliance for Main Street Fairness (SCAMSF) – a statewide group representing brick-and-mortar retailers – argues the deal is unfair to other business in the state and will likely cost thousands of jobs and millions of dollars in lost revenue.  The group said the state has more than lived up to its “good faith” commitment to Amazon.

“This is an issue of basic fairness.  Amazon should not be able to receive a deal that provides it a competitive advantage over South Carolina businesses,” said Brian Flynn, spokesperson for the South Carolina Alliance for Main Street Fairness (SCAMSF).  “Furthermore, it is clear Amazon was not promised anything; instead, the online-only retailer is trying to bully our state into giving them an unfair advantage over other retailers.”

Added Flynn, “Not only will South Carolina businesses be negatively impacted by this special deal, but South Carolina consumers will continue to be held liable for unmet tax obligations due to the fact that Amazon refuses to collect the sales tax and places the burden on its customers.  Elected leaders in Columbia should stand with their constituents and employers and oppose a special handout to Amazon that will end up costing us more jobs than it creates.”

SCAMSF also noted Amazon signed the deal knowing there were no guarantees that a sales tax exemption would be included.  South Carolina currently is experiencing a budget shortfall that is $700 million.

The South Carolina Alliance for Main Street Fairness (SCAMSF) is a statewide organization representing brick-and-mortar retailers that collect sales taxes and are committed to a fair and equitable sales tax system that eliminates the competitive tax advantage granted to certain online-only retailers.

###

I gave the contact, Brian Flynn, a call after I read it, mainly to find out who the South Carolina Alliance for Main Street Fairness might be. He said it was a brand-new chapter (formed in response to the Amazon issue) of a national organization, Stand with Main Street. The point is to fight the tax advantage that online businesses enjoy over real brick-and-mortar businesses here in our communities.

Brian says he is calling himself the executive director, and is paid by retailers, from Mom and Pops to big boxes. I asked him what else he did for a living, and he said he’d just returned from Afghanistan. He’s an intelligence officer with the National Guard — 178th Field Artillery.

I thanked him for his service.

He says while this is the first issue the new organization has worked on, he hopes to see a “fairness” bill introduced in the Legislature later.