The following are bills that I sponsored or co-sponsored this week -
H4610 – School Buses – This bill would privatize the school bus fleet for the entire state.
H4625 – Dept. of Transportation – This bill would move control of this department to the Governor (similar to H4444).
H4636 – Police – This bill would create a “blue alert” that would be issued if a police officer is killed, seriously injured or kidnapped.
You may read each bill in its entirety at www.scstatehouse.gov.
We started the second half of the 119th Session this past Tuesday. Generally, the first couple of weeks are filled with committee meetings so that legislation, including the budget bill, can start moving. It should be noted that I have moved committees from the Agriculture Committee to the Education Committee. Though I will miss battling DHEC regulations, I am looking forward to debating education regulations along with the anticipated texting ban bill.
The House Republican Caucus passed most of our two year agenda last year. So, we are pressing on with tax reform, pension reform and Dept. of Transportation reform. As I have mentioned before, I am the chairman of the Caucus Tax Reform Advisory Committee. I will be presenting our final report to the Caucus in the next couple of weeks. Our goal was to lay a foundation that will enable tax reform to take place over the next three years.
Given the reported problems with DOT finances, I have anticipated that reform effort by signing onto H4444 which moves control of the DOT to the Governor.
Reform of the state retirement plan will be a major battle. Other than the changes required to keep the plan solvent, I will be looking for legislation that will prevent the General Assembly from making changes to the plan that could potentially increase the plan’s unfunded liability.
In anticipation of k-12 education funding reform that will hopefully happen next year, I have signed onto another school choice bill. Education improves when parents have more control of their children’s educational opportunities. We must realize that our entire k-12 system – public, independent and home schools – are major assets to our state. We must take steps to improve the performance and access to the entire system.
Another issue that has impacted the Blue Ridge and Greer community involves the way that we elect judges. Currently, the Judicial Merit Selection Committee determines who is qualified to be elected as a judge. Their current rules require them to report out no more than three candidates even though they may have determined more than three are qualified. We have a local magistrate that has filed to be elected to the Family Court in Greenville three separate times. Each time he was found qualified, but the committee refused to report him out. Each time they have reported out other candidates with less experience. This appearnesss of bias is unfair to the candidate and unfair to our community. I have signed onto H4514 in hopes of correcting this issue.
Budget projections show that might have as much as $1billion in new revenue this year. I am most interested in seeing some of these funds used to further pay down our unemployment system debt to the federal government. We also need to devote some of the funds to repair of our infrastructure. Most importantly, some funds could be used in conjunction with tax reform efforts to pass on a tax break to the citizens of our state.
I am looking forward to the new year and I anticipate positive reform bills to pass. I remain honored to represent District 18 in the SC House.
The following are bills that I sponsored or co-sponsored this week -
H4330 - SC Medal of Honor - This bill would establish this medal to be awarded to South Carolinians who gave their life in service of our country.
H4341 – DHEC - This bill reduce the regualtion authority of DHEC in certain coastal areas.
H4358 – Drug Testing – This bill would require drug testing for applicants for assistance to needy families.
H4423 – Copper Law – This bill would exempt licensed residential homebuilders from the provisions of the recently passed copper law.
H4444 – Dept. of Transportation – This bill would move the DOT to the control of the Governor.
H4514 – Judicial Reform – This bill would require the Judicial Merit Selection Committee to report out all qualified candidates instead of only three.
H4576 – School Choice – This bill would establish a tax credit for parents whose children attend independent or home schools.
You may read each bill in its entirety at www.scstatehouse.gov.
The South Carolina Supreme Court will shortly hear a case challenging the constitutionality of state sales tax exemptions. This case, filed on behalf of the plaintiff by Dick Harpootlian, asserts that sales tax exemptions violate the equal protection clause of the constitution. An affirmative ruling by the court would increase the tax burden for all South Carolinians and challenge the authority of the General Assembly to set tax policy for the state.
Proponents of big government have long despised tax deductions, exemptions and similar provisions. They are not afraid to use the courts to challenge those who benefit from them. Many people in Greenville will remember the legal battle that Bob Jones University fought against the federal government in the 1980s. This battle started when the Internal Revenue Service revoked their tax exempt status as a charitable organization.
The IRS took the position that any deductable donation made to the University was a “subsidy” by the federal government. They further argued that since the government was “subsidizing” the University, the government had a right to dictate the University’s internal policies. The University sued to have their exempt-status reinstated and lost.
BJU lost because the federal government broadly defines tax provisions for deductions, exemptions, incentives and credits as “tax expenditures” by the government. In other words, the government does not view tax deductions as you keeping your income. They view tax deductions as the government giving you some of their money.
This illogical tax expenditure theory was created by Stanley Surrey, the Assistant Secretary of the Treasury for Taxation in the Johnson Administration. He believed that government should not grant any deductions and similar provisions because they reduced the amount of money raked into the Treasury which could then be spent on liberal government programs to further Johnson’s Great Society.
Surrey wanted to reform the tax code to make it simple and efficient. In his mind, simple and efficient meant that government could redistribute money, even to charities, better than private citizens who could not be trusted to support the right charities with their donations. His theory became reality when the Congressional Budget Office began tracking tax expenditures in 1974. This reality was shown to be coercive when BJU lost their tax exempt status.
This all-money-is-government-money theory of tax expenditure was concocted to aid liberals in their efforts to substantially expand government programs. In response, conservatives defended the importance of and expanded the number of deductions and similar provisions in order to allow taxpayers, both individual and corporate, to rightfully keep their money – until recently.
In a strange turn of events, Rep. Paul Ryan, a conservative Republican who chairs the House Budget Committee, declared earlier this year that he wanted to eliminate the largest tax expenditures in the name of tax reform. He asserted that they “diverted economic resources to less productive uses” thereby echoing the words of Stanley Surrey. According to the Congressional Joint Tax Committee, some of those targeted for elimination would be the deductions for retirement plan contributions, employer contributions for health insurance and mortgage interest.
Compare Rep. Ryan’s targeting of the health insurance deduction to the comments by Sen. Robert Packwood on the same subject back in 1983. Sen. Packwood, the Republican who chaired the Senate Finance Committee at that time said that the only reason that America had not adopted nationalized health care was because of the employer health insurance deduction.
Sen. Pat Toomey, a conservative Republican serving on the 12 member debt super-committee, recently targeted deductions in his deficit reduction plan. His plan would eliminate most deductions in exchange for lowering the tax rates for all families – a noble goal if the tax rates stay lowered. If a future Congress decides to raise the rates, then his plan has removed en masse a multitude of deductions that were designed to soften the impact of tax increases.
As a conservative involved with tax reform on the state level, I am confounded by conservative groups who have bought into Surrey’s assertion that deductions and incentives are government subsidies. When they use the terms “subsidy” to criticize deductions for individual taxpayers and “corporate welfare” to criticize incentives for business, they are basing their criticism on a very liberal idea. They ignore that ideas have consequences, especially when the idea expands government control over taxpayer money as was the case with BJU.
Certainly, we need tax reform. Elected officials have allowed our revenue code, both federal and state, to become confusing and primed for abuse. The revenue code should be transparent, relevant and efficient.
However, we must remember that, once granted, government never relinquishes its power to tax. Deductions and similar provisions dilute this power. Each of these provisions represents a hard fought battle in controlling the expansion of government. We would do well to be extremely cautious of those plans that eliminate them all in the name of tax reform.
With 14 million Americans out of work, including nearly 240,000 in South Carolina, our nation desperately needs a president who not only understands how the economy works, but who has a record of helping the private sector create jobs while serving in public office.
President Obama’s failed attempt to spend our way to prosperity continues to hold our economy hostage. In contrast, Gov. Rick Perry’s “Cut, Balance and Grow Plan” offers a practical blueprint to rebuild America’s economy.
The Cut, Balance and Grow Plan will simplify and cut our taxes.
Perry’s plan will give Americans the option of throwing out the 3 million words of the current tax code. Each taxpayer will pay either a 20 percent flat tax on income and file their return on a postcard, or pay their current income taxes along with the fees necessary for tax return preparation every April.
Taxpayers who choose the flat tax will enjoy a higher standard deduction of $12,500 for each individual and dependent, as well as deductions for mortgage interest, charitable donations and state and local taxes. Under the flat tax, a married couple with two children will pay no taxes on the first $50,000 of income. When you combine tax savings with reduced compliance costs, the average South Carolinian making less than $100,000 per year will save over $1,000.
The Cut, Balance and Grow Plan will balance our budget by 2020.
Perry’s plan limits government spending to 18 percent of gross domestic product, cuts $100 billion in non-defense discretionary spending in the first year and builds on those savings until the budget is fully balanced. And to make sure politicians in the future don’t return to the mistakes of the past, Perry will aggressively push for a Balanced Budget Amendment to the U.S. Constitution.
Additionally, taxpayers will no longer have to watch their money used on “bridge to nowhere” projects or to reward failure, because Perry’s plan bans earmarks and corporate bailouts.
The Cut, Balance and Grow Plan will grow our economy.
Perry’s plan will spur significant job creation and economic growth across the country. To create jobs and increase America’s competitiveness in the global marketplace, Perry will cut corporate income taxes to 20 percent – the average rate businesses pay in other developed nations.
Today, American employers have $1.4 trillion in profits earned overseas that will be double-taxed if returned to the United States. Perry will allow companies to repatriate those profits at a one-time rate of 5.25 percent and fix the structure going forward, which could create as many as 2.9 million jobs according to the U.S. Chamber of Commerce.
To stop bureaucratic overreach and create jobs, Perry will place an immediate freeze on all pending government regulations, audit them for their cost and effectiveness, and repeal the ones that kill jobs. He will veto any legislation that creates a new federal program unless lawmakers reduce another program by an equal or greater amount.
America needs Rick Perry’s Cut, Balance and Grow Plan. Unlike President Obama’s stimulus initiatives, which are based on disproven liberal economic theories, Perry bases his plan on conservative principles that have proven effective in Texas.
It is no coincidence that Texas has gained more than one million jobs under Gov. Perry’s leadership, or that nearly 40 percent of American job growth over the past three years has happened in Texas.
Rick Perry’s Cut, Balance and Grow Plan will lead to the creation of millions of jobs, a revival of the American economy and permanent change in Washington’s over-taxing, over-spending, over-regulating culture.
Leadership requires more than just playing to the media. During the last election, Barak Obama obscured his lack of experience with his ability to communicate in front of a camera. He used the media to make many Americans forget that talk is cheap. Candidates who have mastered the media, even some Republican candidates, hold an illusory advantage. As voters, we must not mistake illusion for substance.
America needs the substance that Rick Perry learned as Governor of Texas.
