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Exclusive: Massive “Hidden Tax” On South Carolinians Exposed




Just call it the “fleecing of South Carolina.”

A city of Columbia, S.C. councilman has stumbled upon a massive “hidden tax” on South Carolinians – one that’s deprived them of hundreds of millions of dollars over the last three decades without them even knowing it.

Cameron Runyan – who is running for reelection to Columbia’s city council this fall – is reportedly addressing this massive “hidden tax” during a city budget committee meeting scheduled for this week.  He says the scam applies to all insurance policies in the Palmetto State – health, home, life, auto … you name it.

Of particular interest to Runyan?  The entity collecting the tax – the Municipal Association of South Carolina (MASC).  According to Runyan, this is the only non-profit in America that’s permitted to impose this sort of statewide levy.

Why is that important to him?  The group’s former executive director, Howard Duvall, is currently campaigning for a seat on Columbia’s city council.

We honestly don’t care about the politics behind the issue – we care about the numbers.  And according to documents obtained by FITS, the numbers are staggering.  According to internal MASC data (.pdf HERE), this tax has deprived South Carolinians of a whopping $1.6 billion over the past fifteen years.

That’s right … $1.6 billion.

Over that time period, MASC has collected more than $47 million in fees.

MASC does not post the data from the tax collection program on its website.  In fact the data obtained by FITS was marked “confidential.”

Sounds like there’s a good reason for that …

“They’re making out like bandits on it and they don’t want people to know about it,” Runyan said.

Who pays this hidden tax?  You do.  In higher insurance costs.

“It’s baked into the cake,” Runyan said.

Is your city or town on the “hidden tax” list?  You can check for yourself by viewing another MASC internal document we obtained (.pdf HERE).

It’s also worth noting that a similar scam is run at the county level by the S.C. Department of Insurance (SCDOI), although details of that fleecing weren’t immediately available (rest assured we’ll be following up with them soon, though).

How in the hell do rackets like this get set up?

The roots of this fleecing go back to the 1930s, when local governments began collecting “business license fees” from insurance companies.  In the mid-1960s, some of them began using MASC to collect these glorified kickbacks – and in 1984, municipalities and insurance companies got together and authorized the Insurance Tax Collection Program (ITCP).

This program established a uniform two percent tax on property and casualty policies and a 0.75 percent tax on life and health policies.  For its role in collecting the tax, MASC receives a four percent fee of all taxes collected.

“The fee covers all costs to administer the program included legal fees, software, employees and any other administrative costs,” the group claims.

MASC says it has “substantially reduced” those fees over the years to roughly two percent of the taxes collected.  The group’s executive director Miriam Hair also told FITS that the organization’s centralized collection method creates efficiencies that save taxpayer money.

UPDATE: Where is the legacy media on this issue? (Crickets).