Lawmakers Okay with Power Grabbing Government-Funded Nonprofits?

March 18, 2016

Inside Insight

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By ASHLEY LANDESS

senate bill dies

Some State House pols too busy calling citizen groups ‘liars’ to notice legislation empowering lobbyist principals

This week The Nerve wrote about an outrageous bill proposing to give the Municipal Association of South Carolina (MASC) power to collect the business license tax and even to assign the tax rates. MASC is a lobbying entity comprised of city officials who pay dues from the city coffers, but it isn’t a government agency and has no accountability to the public. In a nutshell, taxpayers have no choice about funding the MASC’s activities and no control over them.

That could get worse. If lawmakers can allow a publicly funded entity (but not a governmental entity, hence an accountable one) to collect taxes, have access to private tax returns, and even play a role in assigning the tax rates to businesses, then there really isn’t much they can’t do.

The state’s business license tax is deservedly among the most hated by business owners because it’s imposed on receipts, not just income; the classifications seem arbitrary; and many business owners have to pay the tax in multiple cities for no good reason. Even more insulting is the requirement that many have to produce their tax returns at city hall.

Small wonder businesses are up in arms. Lawmakers even talked about getting rid of it this year, or at least reducing it. They didn’t, instead choosing to introduce a bill that made some positive changes. Read more about that here.

How could such an outrageous bill pass? Because the flow of information inside the State House is almost always limited to lobbyists and government (often both at the same time). And that information is, to be generous, often disingenuous. The talking points released by the MASC were no exception. The bill giving power to the MASC was gently titled the “Business License Standardization Act,” and the power grab by a lobbying entity controlled by local government officials was presented as “streamlining” and “standardizing.” Even more absurd, all of it was said to “meet the goals” of businesses.

But what of the reform bill? It’s nothing extraordinary, but it would at least provide a fairer taxation system. Naturally, then, MASC calls it “not business friendly” because it gives an “unfair advantage” to some businesses by not making them pay the tax if they don’t actually own a business located within the city. Since the flat tax is a “one size fits all” system, it’s apparently “not business friendly.” And since the reform bill grants the authority to administer the tax program to the state’s Department of Revenue instead of a private lobbying association, it’s made to sound like it punishes businesses.

Click here to see MASC’s highly questionable “fact” sheet.

If you’re expecting outrage in the State House, you’ll be disappointed. Senators didn’t have time to challenge the MASC’s information. They were too busy slamming a private entity that isn’t funded with public money for alerting their members about the dangers of the current slew of ethics proposals. Of course, we at SCPC have been researching and reporting that information for several years – nothing the South Carolina Americans for Prosperity has said publicly is new. In fact, according to their newsletter, SC-AFP got much of their information from SCPC’s work.

Senators mostly avoided specifics, focusing instead on calling AFP’s director a liar, and said the information they were sharing with their members was “smut.” Yes – smut – as in obscene or lascivious talk.

Apparently no one is nearly as concerned about giving taxation power to a lobbying entity as about the gall of a wholly nongovernmental, non-publicly funded organization to inform their members about fake ethics reform. (Which, in fact, is pretty much all there is over at the Statehouse. Read more here).

No one challenged specifically the content of what AFP said – just the overall outrage with which they said it.

Meanwhile, no outrage about giving taxing power to a lobbying group, or challenging their talking points. Is it any wonder our state is the most corrupt in the nation?

Ashley Landess is president of the South Carolina Policy Council, The Nerve’s parent organization.