Piñata Politics Just Tempest in a Tea Party Pot

By Becci Robbins

Talk about falling down the rabbit hole. At this time last week I was making a gift for my friend Donna Dewitt to celebrate her retirement from the SC AFL-CIO. And what says party like a piñata?

Yes, the piñata was my idea. I made it. I filled it with candy and Bobby Bucks. I videotaped its predictable demise. I sent the clip to friends to amuse them in these most un-amusing times. Who knew it would go viral?

The breathless response has been over the top, a sad commentary on the echo chamber that is the Internet.

Was the piñata in poor taste? Yes. Was it malicious? No. Am I sorry it caused some people to lose their minds? That’s their problem.

My only regret is having put a dear friend in the position of having to defend a piñata she did not know about or ask for. Donna works harder at a thankless job than anyone I know. She doesn’t deserve the heat she’s taken, including death threats and a promise from Gov. Nikki Haley on national TV to “continue beating up on unions.”

To fixate on unions instead of dealing with the critical problems we’re facing is to use the tired politics of distraction. I should have expected it from the governor, whose favorite posture is that of victim – first of racism, then sexism, now union thugs.

While Haley has made an odd habit of union-bashing, for me she crossed the line when she used her last State of the State address to proclaim: “Unions are not needed, wanted or welcome in South Carolina.” Instead of a message to unite all of us who call the Palmetto State home, she served up a campaign speech of red meat. It was inappropriate. And insulting.

When the governor bashes unions, she’s bashing my colleagues. She’s bashing my friends. She’s bashing my family. She’s bashing me. So forgive me for taking it personally, but I’ve had enough.

The piñata was intended as comic relief among friends after a long day of talking about the state budget, our election system and workers’ rights at the SC Progressive Network‘s annual spring conference. The party was a chance to unwind and honor Donna, our longtime co-chair. For the governor to use the incident for political gain is predictable but unfair, and more than a little ironic.

After all, Donna didn’t do anything as shameful as cut funding for education and mental health services. She didn’t gut environmental regulations or stack boards with corporate cronies. She didn’t show contempt to the Supreme Court. She didn’t campaign on a promise of transparency and then routinely sanitize her paper trail. She didn’t lobby for a corporation while being on their payroll. She didn’t use her power like a bludgeon.

Donna smacked a piñata. Which is, good people, what happens to piñatas. I made one of a Corporate Fat Cat for John Spratt’s retirement party, and it, too, got smashed. Why didn’t it go viral? Because nobody could make political hay out of it.

And that’s exactly what the governor is doing. Yesterday I got an email solicitation from her office inviting me to watch the video and contribute $250 to fight “Big Labor.” The email mentions President Obama twice. Talk about tasteless.

The governor will get no apology from me. But I offer one to Donna for putting her in an awful position. She could have risked hurting my feelings by refusing to play along at the party. Or she could have thrown me under the bus when she started catching heat. She did neither. As a labor leader, she knows something the governor doesn’t: solidarity matters most when it’s inconvenient.

Sorry if this flap has embarrassed any of our members. Please know that Donna and Network Director Brett Bursey have made the best of the rare media attention. (Watch Brett on Fox and Donna on CNN, for starters.)

It may not be pretty, but at least people are talking about organized labor in South Carolina. It’s a conversation that’s long overdue, and it’s up to us to keep it honest.

Becci Robbins is SC Progressive Network Communications Director. Reach her at becci@scpronet.com.

Is South Carolina broke or morally bankrupt?

By Sen. Phil Leventis
Sumter, SC

With my legislative tenure coming to an end, I want to share something with my fellow South Carolinians. Our state is not broke, but we are teetering on the verge of moral bankruptcy in our failure to meet the needs of our citizens. That’s why I have introduced the TRAC Recommendation Act (S.1454) that eliminates or reduces many sales-tax exemptions. The nearly $1 billion this act will raise annually would be used to pay for education and local governments, which continue to be shorted due to lack of revenue.

During my 32 years as a legislator, I have been guided by the principle that government should invest in meeting the needs and aspirations of its citizens. This principle has been undermined by an ideology claiming that government is the cause of our problems and, accordingly, must be starved.

The real source of our problems is a government unwilling to invest tax dollars in itself and its citizens. When businesses strive to be competitive, they invest in their future. That is what we have to do today in South Carolina to ensure a more prosperous future.

We’re not broke. The problem is that narrow political ideology has trumped statesmanship. The lack of political will to fairly reform our tax code to meet our basic civic contracts for education and infrastructure leads our citizens to believe that “minimally adequate” is the best we can hope for.

In 2010, the Tax Realignment Commission (TRAC) was created to review the state’s tax code and recommend changes “designed to ensure that the state’s tax structure is balanced so that the system is adequate, equitable, and efficient.” The TRAC commissioners and staff did a thorough job of reviewing tax loopholes and inequities, and recommended reforms of sales-tax exemptions that could raise close to $1 billion the first year.

Sadly, ideology trumped common sense, and the Republican-created and -appointed commission’s goal was to use any new revenue to further reduce taxes and increase corporate subsidies, not pay our bills.

Our state’s fixation on being business-friendly is reflected in the Forbes ranking that puts South Carolina fifth in its “business friendly regulatory environment” but 44th in quality of life. Forbes ranks the quality of our labor supply at 22nd, far behind North Carolina (third) and Georgia (fourth). The message this sends is that South Carolina, with its lax regulations and unskilled labor force, is a cheap place to do business — but you might not want to live here.

To put the anti-tax ideology in perspective, consider that of all the industrialized nations, only Turkey and Mexico have a lower individual tax burden than the United States, according to the Organization for Economic Cooperation and Development. The anti-tax National Tax Foundation ranks South Carolina 43rd among the 50 states in taxes as a percentage of income, and dead last in per capita state and local taxes. You begin to wonder why we need to further reduce taxes when we can’t pay our bills.

The House’s budget cuts mandatory funding for education by $665 million and local government funds by $71 million and robs $118 million from the general fund to cover the sales-tax shortfall of Act 388’s property-tax swap. These spending levels are set by law, but education and local government funding obligations are ignored annually by budget provisos because of a presumed lack of revenue and a clear shortage of political courage. These cuts mean larger classes, fewer teachers, police and firefighters and deteriorating infrastructure, all of which combine to make our state less competitive.

The TRAC recommendations on sales taxes would raise nearly $1 billion next year and more in coming years. This is what we need to meet these mandatory spending requirements, and more comprehensive tax reforms would meet and exceed them for years to come.

I’m sponsoring this bill because there is no real legislative debate — and little public understanding — about how we could raise the revenue to pay our bills with fair and broad tax reforms while also improving our quality of life and strengthening our economy.

The critical debate I hope to spark is whether the role of our government is shaped by the special-interest groups who make the majority of campaign contributions, or by the citizens who pay the taxes. I believe that citizens are willing to pay fair and equitable taxes when they get their money’s worth. It’s called democracy, and it’s past time for South Carolinians to reclaim it.

Sen. Leventis is a Sumter businessman; contact him at philleventis@scsenate.gov.

Report: $70 million in SC workers’ taxes diverted yearly to pay corporate subsidies

Nearly $700 million a year in state income taxes withheld from worker paychecks in 16 states is being used to provide lavish subsidies to corporations rather than paying for vital public services. These diversions have gone to more than 2,700 companies, including major firms such as Sears, Goldman Sachs and General Electric. Few, if any, of the affected workers are aware, because no state requires they be informed on their pay stubs.

South Carolina’s Job Development Credits cost $70.3 million per year, the fourth-costliest diversion among the states. “Putting aside the question of this being a good investment of tax dollars, the immediate problem is a lack of transparency,” said Dr. Hoyt Wheeler, Co-chair of the SC Progressive Network.” Wheeler, a retired business professor, noted that the SC Department of Revenue does not reveal the credit amounts the 221 companies receive, or require the workers to be notified that their employer is pocketing their state income tax. “Individual workers at some of these companies can be donating as much as $1.25 an hour for years to the corporate bottom line, while thinking they are helping pay for schools and infrastructure,” Wheeler said.

These are the key findings of Paying Taxes to the Boss: How a Growing Number of States Subsidize Companies with the Withholding Taxes of Workers, a study published today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC. It is available here.

“Diversion of personal income tax revenues into subsidies violates how economic development has been defined,” said Good Jobs First Executive Director Greg LeRoy. “States are draining a revenue source that helps many of them address structural deficits.”

Paying Taxes to the Boss traces the rise of 22 subsidy programs derived from personal income taxes (PIT) that together cost about $684 million a year. “These programs are justified in the name of job creation, but they often end up subsidizing companies to move existing jobs from one state to another. In other cases, they go to employers that threaten to move unless they get paid to stay put,” said Philip Mattera, research director of Good Jobs First and principal author of the report.

“We recommend that states seriously consider abolishing PIT-based subsidies. Short of that, we urge Truth in Taxation: that companies be required to disclose the details of how much money is going where on every pay stub of affected workers,” LeRoy added.

The report examines South Carolina’s PIT-based subsidy program, known as Job Development Credits, or “JDC”. The JDCs are considered by the state Department of Commerce to be the “most significant incentive created by the 1995 Enterprise Zone legislation. The programs work in various ways in different states. Some allow employers to immediately retain (and never remit to the state) a large portion of the withholding taxes generated by designated new or retained workers. Some provide cash rebates or grants calculated the same way. Others provide credits against corporate income taxes or other business levies, with the value of those credits based on the withholding taxes of new or retained workers. (Some of these credits are cash-refundable if the credit exceeds the company’s tax liability.)

The share of withholding taxes diverted into subsidies can be as high as 100 percent (such as EDGE tax credits in Illinois and Indiana) and the duration can be as long as 25 years (such as Mississippi’s Withholding Rebates). Twelve programs divert 75 percent or more of withholding, and 18 do so for 10 years or longer.

The most expensive program is New Jersey’s BEIP, which in FY2011 approved new grants worth up to $73.2 million over their multi-year terms and disbursed $178 million during the year for previously approved contracts. Among states with subsidy recipient disclosure, those with the largest number of participants in PIT-based programs are: Ohio (567), Kentucky (509), Illinois (315), New Jersey (306) and Indiana (283).

Network joins SC Small Business Chamber in screening new documentary “We’re Not Broke”

The SC Progressive Network‘s monthly movie night is changing time and location to co-sponsor the newly released 80-minute documentary We’re Not Broke. The public is invited to a free screening on Wednesday, April 25, 6:3-8:30pm at the USC Law School Auditorium, 701 S. Main.

After the screening, the film’s director, producer and writer—Karin Hayes—will be with us to answer questions. The evening will conclude with a discussion of the next steps to advocate for Congress to close corporate tax loopholes, end offshore tax havens and resist another repatriation tax holiday. This free event sponsored by the SC Small Business Chamber of Commerce.

With the United States in the grip of the worst economic recession since the Great Depression and an unprecedented budget deficit, the conclusion that our country is broke seems unquestionable. At least that’s what politicians and pundits want ordinary citizens to believe as they call for massive spending cuts.

Karin Hayes and Victoria Bruce’s searing exposé reveals that, strangely absent from this rhetoric, is the infuriating fact that multibillion-dollar corporations are based in the U.S., make money from American consumers, and often even receive lucrative contracts from the government, yet pay nothing in U.S. income taxes. By exploiting tax-law loopholes and spending millions on lobbyists to pressure politicians to protect their interests, corporations pocket billions while the less-connected middle class disappears, and the poor get poorer.

We’re Not Broke explores how the government has allowed this inequality to develop and the growing wave of discontent that it has fostered. Presaging the larger wave of protests that have arisen in recent months with the international Occupy movement, the film follows a number of activists who have had enough and are demanding that corporations finally pay their fair share.

The rotten Apple in the tax barrel

By Scott Klinger
Business for Shared Prosperity

Apple has gone on a very public tax strike. Months after reporting the second highest quarterly profits in U.S. history, America’s favorite company is refusing to bring home more than $60 billion of offshore funds in protest of the taxes it would have to pay.

Apple paints its predicament as unfair. Yet Apple’s funds did not build up offshore because its iPhones, iPads and Macs are so much more popular overseas than they are at home. Though more than two-thirds of its retail stores are in the United States and Apple sells more product in the U.S. than in any other nation, it reports to shareholders that it made 24 cents in pre-tax profit for every dollar of sales in the United States, compared to 36 cents profit on every dollar of sales abroad.

Apple’s profit margins are so much lower in the U.S. and billions of dollars of cash piled up offshore because Apple’s accounting and tax staff is as clever as its engineers and product designers. They take some of their profits earned in the United States and through accounting hocus pocus transform them into foreign profits that are not taxed in the U.S. until they are returned here.

Here’s how these tax avoidance strategies work. Apple conducts the bulk of its product and research development in the United States. This work is done largely by engineers educated in U.S. schools, often using basic research that was funded by U.S. taxpayers. Apple then takes the patents earned by its U.S. labs and registers them offshore in tax haven nations that impose little or no taxes on income on royalties from patents and other intellectual property. When Apple sells an IPod or Mac, it charges a lot for the use of the patents, telling the IRS that without this intellectual property, the product would be virtually worthless. By doing this, Apple transfers much of the profit from each sale to the tax haven, while retaining the costs of research, advertising and management in the United States.

Apple’s transfer pricing shenanigans are legal, but drew criticism from tax justice advocates, particularly in Europe. Since then, Apple’s tax disclosures are far more opaque, making it impossible to discern whether they have backed off from their aggressive tax management, or whether they simply don’t talk about it publicly anymore.

Tax haven abuse by corporations and individuals costs the U.S. Treasury $100 billion a year. One way to begin to solve this problem is to require improved corporate tax disclosure. If Apple’s customers and other taxpayers could see that Apple was booking the largest share of its sales in the United States, while it booked most of its profits in Ireland, the Netherlands and other tax havens, it would provoke important and necessary discussions. Another means of stemming the abuse would be to treat foreign subsidiaries managed and controlled from America as U.S. operations for tax purposes, a change proposed by Senator Carl Levin in the new CUT Loopholes Act.

When companies like Apple aggressively avoid their fair share of taxes, they shift the tax bill to their customers and other taxpayers. In the 1950s, corporate income taxes accounted for nearly a third of total federal government receipts. Last year, corporate taxes accounted for less than 8 percent of Treasury receipts, an all-time low.

The deficits that result from corporate tax avoidance has increased pressure for the government to cut spending, including spending on the very sort of basic research without which Apple, Google and Microsoft would not exist. The first modern computers and the Internet were not invented by people named Jobs, Wozniak, Hewlett, Packard or Gates, but by unsung scientists working on government-funded research, paid for by taxpayers. That taxpayer-funded government support continues today: Google co-founder Sergei Brin, for example, received a National Science Foundation graduate research fellowship promoting digital libraries while laying the foundation for what would become Google.

Apple’s tax strike is shortsighted. By denying the government tax revenues, Apple is refusing to help plant the seeds from which the next great technological innovations will grow.

Scott Klinger CFA is Tax Policy Director for Business for Shared Prosperity. Reach him at scottklinger@businessforsharedprosperity.org. Article courtesy of American Forum.

Progressive Network to create show featuring activists who changed South Carolina history

In March, the SC Progressive Network screened The People Speak, a documentary inspired by the book A People’s History of the United States, which chronicles the lives and experiences of ordinary Americans who, through their words and actions, changed the course of our history. The premise of the film is that change doesn’t come from the top, but rather from the bottom.

Author, historian, and activist Howard Zinn wrote the books and developed the film because he wanted Americans to recognize the power of protest in shaping their country’s history. Zinn, who died in 2010 at 87, said our textbooks present the story of America only through the eyes of its generals and presidents, giving “a distorted view of the past.”

The film got us thinking that we should take Zinn’s idea and apply it to South Carolina history. We’re inviting historians and activists to collaborate on writing, staging and filming a 45-minute or hour-long program documenting the work of some of the Palmetto State’s most important historical figures, in their own words. Like Zinn, we want to focus on those whose passion and commitment to social justice helped shape South Carolina’s story.

If you want to join this collaborative effort, please call us at 803-808-3384, email becci@scpronet.com, or join our Facebook page. We’re shooting to debut the production in September. Between now and then, we’ll meet as needed at the Network’s office to brainstorm and issue assignments. If you have ideas for people to feature in the program, or are interested in performing, please contact us.

See additional resources at The People Speak web site.

SC AFL-CIO supports bill to repeal SC’s “stand your ground” law

As the country attempts to understand the shooting of 17-year-old Treyvon Martin, the SC AFL-CIO calls for justice for Treyvon’s family and supports Rep. Bakari Sellers’ proposed bill to repeal the “stand your ground” provision of South Carolina’s “Protection of Persons and Property Act” enacted in 2006.

“We have long had laws on the books that allowed for legitimate self defense,” said SC AFL-CIO Vice President Ken Riley. “These new laws are being used by vigilantes to excuse frontier justice against unarmed people. People of color have a deadly serious reason to fear that this law provides bigots an excuse to shoot somebody as their first option to resolve a problem.”

The state’s “stand your ground” clause was recently used in the defense of a white Spartanburg home owner who shot a homeless man who was squatting in a vacant house for sale. District Solicitor Barry Barnette said the shooting was justified under the “stand your ground” provision of the state law. “Obviously, your have a right to defend your property,” Barnette told the Spartanburg Herald Journal about the shooting.

The SC AFL-CIO believes these unnecessary laws conflict with its commitment to equal rights and due process for all citizens. “These new laws have no place on the books of a society that considers itself civilized,” Riley said.

The SC AFL-CIO supports Rep. Sellers’ bill that would strike the section of the statute that states, “A person who is not engaged in an unlawful activity and who is attacked in another place where he has a right to be, including, but not limited to, his place of business, has no duty to retreat and has the right to stand his ground and meet force with force, including deadly force, if he reasonably believes it is necessary to prevent death or great bodily injury to himself or another person to prevent the commission of a violent crime as defined in Section 16-1-60.”

SC Progressive Network Movie Night to feature popular documentary “The People Speak”

For its March monthly movie, the SC Progressive Network will feature THE PEOPLE SPEAK, a documentary film inspired by the books A People’s History of the United States and Voices of a People’s History, which chronicles the lives and experiences of ordinary Americans who, through their words and actions, changed the course of our history.

The movie will be shown March 27 at Conundrum Music Hall, 626 Meeting St., West Columbia. Free entrance, free popcorn. A fine selection of beer, wine, and sodas will be available for purchase. Door opens at 6:30pm; film at 7pm.

The philosophy espoused in the film is that change doesn’t come from the top, but rather from the bottom, and that without those everyday citizens pushing for betterment, there would be no America. This film takes us on a journey from the founding of our country to the civil rights movement, all the way up through today.

Author, historian, teacher, activist, and now television producer Dr. Howard Zinn is a man on a mission. He wants Americans to recognize the power of protest in shaping their country’s history. Along with executive producers Matt Damon, Chris Moore, Josh Brolin, and Anthony Arnove, he is moving his message from high schools and college campuses to film and, later this year, to HISTORY.

Zinn, who died in 2010 at 87, has been a history professor for most of his professional career, and in the lecture hall and in his writings, particularly his very popular A People’s History of the United States, he espouses history “from the ground up” in an articulate and engaging way. If our textbooks present the story of America only through the eyes of its generals and presidents, Zinn argues, it gives “a distorted view of the past.” Certainly he provides a powerful counterbalance to the hero-centric approach of traditional textbooks. In 2004 Zinn joined with Dr. Anthony Arnove to publish a collection of primary source documents titled Voices of a People’s History of the United States, an academic bestseller on college and high school campuses. The materials range across the length of American history and feature letters, petitions, poems, speeches, and songs from “women and slaves, immigrants and youth, soldiers and students.”

Zinn and Arnove began to organize public performances of selections from Voices in 2003, before its official release, when A People’s History of the United States sold its 1 millionth copy (it has now surpassed the 2 million mark). Today, Voices brings alive the words and emotions of the past with songs and dramatic readings performed by well-established artists. At a presentation this past May celebrating the publication of A Young People’s History of the United States in New York City, seven performers gave new life to the words of famous dissenters — such as Elizabeth Cady Stanton, Frederick Douglass, and Martin Luther King Jr. — and lesser known, but equally stirring, voices from the past.

Bill requiring voters to register by party goes nowhere

The SC House Judiciary Committee today debated a bill to require voters to register by party to vote in party primaries. The SC Progressive Network opposed it, arguing it posed an unnecessary impediment to voting rights. South Carolina has more legislators chosen by primary than any other state.

Enough Republicans on the committee had concerns about limiting voters’ options in primaries — which are paid for by all taxpayers — to send the bill back to subcommittee, making it unlikely the bill will pass this session.

Network Director Brett Bursey pointed out to the committee that 20 of its 25 members had no opposition in the general election and they won their seat in the primary. This applies to both Republicans and Democrats; see memo below.

A majority of the committee members won 99 percent of the vote in their uncontested general elections.

“Sixty-five percent of South Carolina voters had only one candidate to vote for in the last general election for legislators,” Bursey said. “If you can’t vote in the primary, you don’t have a voice on who represents you in the State House.”

Due to partisan redistricting over the past 30 years, South Carolina has the least competitive general elections in the nation. The creation of “safe” legislative districts resulted in 80 of the states 124 House districts (65 percent) having only one major party candidate on the general election ballot. In these 80 races, the voters only opportunity to cast a meaningful ballot was in the primary.

As long as the majority of elections for the legislature are decided in the primaries, all voters must be afforded the opportunity to participate in open primaries. Until our general elections are competitive, restricting participation in the primaries effectively prohibits citizens from casting a meaningful vote for their representative.

Twenty of the 25 members of the House Judiciary Committee had no major party opposition in the 2010 general election. These members took office by winning their party’s primary, often with no opposition.

House Judiciary members with general election opposition (with percentage of general election vote)

Nanny 66% R
Bannister 75% R
Quinn 72% R
Peter McCoy 47% R (Anne Peterson Hutto 43%, Eugene Platt 8%)
Leon Stavinakis 55% D

House Judiciary members with NO general election opposition (with percentage of general election vote)
James Harrison 99% R
Alan Clemmons 99% R
George Hern 99% R
Jenny Horne 99% R
Dan Hamilton 87.92% R
Karl Allen 99% D
Derham Cole, Jr. 99% R
Eddie Tallon 99% R
Walton McCloud 98% D
Greg Delleney 99% R
Boyd Brown 98% D
David Weeks 99% D
Laurie Slade Funderburk 99% D
Thad Viers 99% R
James Smith 99% D
Todd Rutherford 88% D
Tom Young 99% R
Bakari Sellers 99% D
Seth Whipper 99% D
Mike Sottile 99% R