Vending Machine Legislation

Vending Maching Style Corruption in SCI am a Democrat, and I am proud of it.

However, the S.C. Press Association distributes this column, and neither they nor I want it to be a weekly partisan rant — there’s far too much of that in both our national and state politics already.

That said, this column is about one thing: the corruption of the Republican leadership in the S.C. House of Representatives.

Yes, that’s harsh. And, yes, at least in a sense, it’s partisan. But what they have just done with so-called “sales tax exemption reform” is, in fact, completely corrupt – and it should be labeled as such.

Put simply, the sold out – totally. They looked at the corrupt, rancid, special-interest driven tax system and voted to continue it – and worse, they voted to do so at the expense of our children.

First the facts. Our current state tax code has almost $3 billion in sales tax exemptions,  i.e., special-interest tax breaks. That’s $3 billion a year , every year, in revenues we could use to do all the things we need to do in this state, from responsible tax cuts to vital investments in education and infrastructure..

And while some of these exemptions are at least theoretically defensible, most are simply the result of the “vending-machine” style corruption that’s so common these days in Columbia: a special interest group hires a lobbyist, he or she deposits their money in the incumbent reelection machine, and out pops the legislation at the other end.

In the case of sales tax exemptions, the system has become so rotten that we actually exempt $2.7 billion a year, while we only collect $2.5 in sales tax. It’s like Swiss cheese, where there is more hole than cheese.

Things have gotten so bad that everyone who looks at this objectively agrees that something must be done. Numerous studies have been commissioned — by the SC Chamber of Commerce, citizen groups, and even the Legislature itself – and they all came to the same conclusion: eliminate some sales-tax exemptions.

In 2010, the Republican leadership appointed a Republican-dominated Tax Realignment Commission (TRAC), and they proposed eliminating close to $1 billion in deductions each year. Many considered this wimpy when compared to the $3 billion in existing deductions, but it was a start.

Then the lobbyists and special interests went to work, massaging legislators and calling in the favors they think they are due based on their campaign contributions. They all had one goal: getting their exemption protected, looking out for themselves.

When the Republican House leadership finally got around to introducing a bill this year, this $1 billion had been reduced to only $220 million – less than a quarter of what the Republicans’ own TRAC recommended

And as bad as this was, it got even worse, much worse.

The lobbyists and their legislator allies kept putting exemptions back in, until the final bill that passed the House last week by a 63-39 vote had less than $11 million in exemption cuts.

A lousy $11 million – that’s only 5% of what was originally proposed by the Republican leadership just a few weeks ago in their already disgustingly weak bill with $220 million in exemption cuts.

$11 million in cuts out of $3 billion in existing exemption – that’s 0.00003%.

Republican Rep. Bill Taylor, who helped draft the original proposal said it was so bad that, “If you [the special interest group] showed up, you got your exemption.“

And at the same time this was going on, the House cut another $665 million from mandatory education funding – this on top of the 25% cut education has already taken in this state over the last four years,, the biggest cut of any of the 50 states.

It was a sleazy sell out by the Republican leadership in the House at the expense of our children.

And that’s not politics. That’s corruption.

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Editor's note: This story originally published at SCNewsExchange.com. Illustration: From DonkeyHotey's flickr photostream and used under Creative Commons license.
Phil Noble

Phil Noble

Phil Noble is a businessman from Charleston and he currently serves as President of the South Carolina New Democrats, an independent reform group started by former Gov. Richard Riley. Noble is one of the leading experts in the US and internationally on the Internet and politics. Noble is the founder of PoliticsOnline and its affiliated company Phil Noble & Associates, an international public affairs consulting firm. Noble is a veteran of over 300 political campaigns and public affairs projects in 40 states and 30 countries. He has worked to elect the head of state in 15 countries.