Nikki Haley’s “Empire” Strikes Back

There are two way for elected officials to approach job creation … the command economic method (in which government uses taxpayer resources to set investment priorities) and the free market method (in which the laws of supply and demand are permitted to dictate the flow of capital).

Here in South Carolina, our state has always operated under the command economic model – which has been an abysmal failure (even prior to the onset of the recession). Now things are even worse – our unemployment rate is the nation’s fourth-highest, our competitive position is deteriorating and our state has officially slipped back into recession.

Unfortunately, rather than recognizing the futility of this top-down approach and targeting tax relief toward small businesses (who create 95 percent of the jobs in this state) and individual income earners (who drive our consumer economy) – our “Republican” leaders have chosen instead to force these groups to subsidize an ever-increasing incentives tab for select special interests.

(To read more about this shifting tax burden, click here).

During her six years in the S.C. General Assembly – and during her campaign for the Republican gubernatorial nomination – Nikki Haley courted Tea Party voters by promising to “take government back” on behalf of the people.

“The path to economic recovery lies not in growing our government but in strengthening our businesses and our people,” Haley said in 2009.

Of course after winning the GOP nomination, Haley reversed herself – abandoning her prior support for individual income tax relief in favor of a ridiculous corporate tax-grocery tax swap. Not only that, Haley disingenuously referred to her plan as eliminating the “small business income tax,” a levy that doesn’t exist in South Carolina.

Since winning election – albeit by a narrower margin than anyone anticipated – Haley has fully embraced government-run economic development efforts.

That approach has put her at odds with the state’s Tea Party leaders and fiscal conservative politicians – all of whom support a reduction in South Carolina’s reliance on special interest incentives, as well as reforms that will provide real tax relief to the state’s 65,000+ small businesses and 100,000+ sole proprietorships.

Now, our source inside the governor’s office – the same one who provided this revealing look at Haley’s inter-office “caste system” – tells FITS that the governor has begun to wage a subterranean battle against opponents of government-funded incentives.

“She’s working behind the scenes to take the initiative away from them,” our source says. “She has a list of people she’s targeting. She’s going for their heads, too.”

The source mentioned that two well-connected Columbia, S.C. law firms are helping Haley in her efforts to “send a message” to specific state legislators and limited government advocates – although they declined to name the two firms.

“She wants to scare these lawmakers into backing off,” our source says. “She’s paranoid of a Tea Party primary challenge.”

According to our source, Haley’s campaign is designed to attack any lawmaker (or Tea Party leader) who dares to question the efficacy of government-funded incentives by labeling them as “anti-business.” The campaign is also intended to suppress support for incentives transparency legislation – even though it’s unlikely that such a bill will ever be passed.

Haley’s moves come as activists on both ends of the political spectrum are rejecting the culture of “crony capitalism” and demanding greater fairness and transparency in the state’s tax code.

“The Occupy and Tea Party movements are driving this,” our source says. “Not necessarily the demonstrations but what they symbolize.”

Look … we get that Haley has forsaken small businesses and individual taxpayers. But now it appears as though she is actively trying to take out the politicians and Tea Party leaders who are standing up for those constituencies.

That’s incredibly depressing. In eight years, former Gov. Mark Sanford failed miserably when it came to campaigning on behalf of true limited government advocates. Now we have a “Tea Party” governor who is waging an underground war against the Tea Party?

Thickening the plot, according to our source in the governor’s office one of the law firms Haley is allegedly conspiring with has directly benefited from these incentives – an allegation that’s been seconded by a pair of state lawmakers familiar with the deal.

“(The firm) got a FILOT they shouldn’t have gotten,” our source says – referring to a “Fee In Lieu of Tax” agreement that was awarded to the firm during the construction of its new downtown Columbia, S.C. headquarters.

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