SC’s Bank Of America Boondoggle
Unless South Carolina taxpayers specified otherwise, their 2012 state income tax rebates are being sent to them in the form of a Bank of America debit card. And guess what … if you’re not a Bank of America customer, you’re going to be paying fees on many of the transactions associated with your new card.
What a rip off, right?
S.C. Comptroller General Richard Eckstrom approved this controversial deal on behalf of the S.C. Department of Revenue (SCDOR) – one of Gov. Nikki Haley’s cabinet agencies.
According to SCDOR, using debit cards to distribute rebate money will “save” the agency $5 million a year in printing and postage costs. Of course the last time we checked South Carolina has no mechanism (debit card or otherwise) to rebate savings back to the taxpayer … which means that this $5 million won’t really be saved, it will be spent someplace else in government. Also, Bank of America is charging South Carolinians fees to withdraw cash from its institutions – as well as from non-Bank of America ATMs (which have limits on withdrawal amounts).
Nice, huh? And this is the institution that received tens of billions of dollars in bailout money from taxpayers during the recent recession.
How much money is the bank making off of this racket? We don’t know … but we do know that Bank of America customers are getting an unfair competitive advantage over other rebate recipients, which sounds to us like a lawsuit waiting to happen.
Aside from security concerns, this arrangement strikes us as highly unethical. First, it’s patently unfair to anyone who doesn’t have a Bank of America account. Second, it represents yet another attempt by the government to influence market behavior (encouraging spending as opposed to paying down debt, saving money or investing it).
Anyway, if SCDOR wants to dole out these rebates via debit cards instead of checks or direct deposits we have no problem with that – so long as any fees associated with the cards are waived for non-Bank of America customers.
Also, we would once again argue in favor of a taxpayer rebate fund so that the “savings” ostensibly achieved by this program actually reach the taxpayers (you know, the people being saddled with new fees as a result of this “reform”).