Last month, so-called “Republicans” in South Carolina – who for decades have steadfastly refused to lower taxes for individual income earners and small businesses – fast-tracked a $1.3 billion crony capitalist giveaway to Scout Motors, a subsidiary of Volkswagen.
This corporate welfare handout was drafted on March 8, 2023, and within a week had cleared both chambers of the S.C. General Assembly (on the strength of two lopsided votes). Five days later – on March 20, 2023 – the giveaway was signed into law by GOP governor Henry McMaster.
Twelve days …
That’s how long it took these “conservative” politicians to hand over $1.3 billion of your money to a bunch of woke crony capitalists.
How long will it take them to provide sustained tax relief to the people footing the bill for this giveaway? And for a record-breaking $36.6 billion state budget this coming fiscal year?
Who knows … because they’ve never done that.
South Carolina taxpayers and small business owners are always the ones getting squeezed … never the ones getting any help. And the handful of lawmakers who are trying to help them level the playing field? They are currently getting attacked by the establishment.
Which, by the way, has presided over the most fiscally liberal GOP-controlled legislature in America three years running.
The one good thing about the Scout Motors’ sellout? It proves once and for all where lawmakers’ real priorities are … and just how quickly they will move heaven and earth to advance a piece of legislation that’s important to their special interest masters. Hopefully voters will recall such prioritization the next time these “conservative” politicians go back to their districts and talk about how they “ran out of time” or “couldn’t muster enough support” for genuine pro-taxpayer, pro-business agenda items.
Yeah. Muster this (extends one-fingered salute) …
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I bring this issue back up because – as I have often pointed out – the GOP’s bloated bureaucratic/ out-of-control crony capitalist approach to “economic development” isn’t working. In fact, South Carolina’s already lagging employment situation continues to deteriorate – as do our anemic income levels. But behind those atrocious outcomes is an even more concerning national trend … one South Carolina policymakers need to keep a close eye on.
Earlier this month, economists at UBS investment bank published a note stating that “one of the more underappreciated signs of distress” in the aftermath of the recent Silicon Valley Bank (SVB), et. al. collapse was “emanating from the small and mid-size enterprises sector.”
According to UBS credit strategy head Matthew Mish, small firms are “facing the most severe pressure from rising rates, persistent inflation and slowing growth.”
Mish based his analysis on a review of private bankruptcy filings which – according to UBS’s Evidence Lab – were far exceeding their Covid-19 peaks as of late February 2023. And that was obviously before the bank collapse.
Why would small businesses be tanking at such elevated rates during an economic rebound? And given that these small businesses are responsible for at least six out of every ten jobs in America – what does this mean for the nation’s employment economy moving forward?
"At this stage, the concerning trend in private filings does not appear to have spilled over to the US labor market," Mish continued.
At this stage ...
When it does? Watch out.
If I have said it once, I have said it a million times: South Carolina has the highest top marginal income tax rate in the entire southeast - and the 11th highest rate in the nation. And that’s after lawmakers temporarily shaved a modest 0.5 percent off of the top marginal rate in 2022. This oppressive - and regressive - levy serves as a distinct disincentive to entrepreneurship, job creation and income growth, inhibiting the Palmetto State’s economic competitiveness on multiple levels. Sadly, "Republican” supermajorities (and South Carolina’s GOP governor) continue to squander massive taxpayer-provided surpluses on unnecessary bureaucratic expansions and billion-dollar handouts to select corporations.
When will that change? Only when South Carolina taxpayers - and small business owners - replace the pusillanimous politicians in Columbia, S.C. with pro-free market representatives committed to changing the failed approaches of the past.
ABOUT THE AUTHOR ...
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children.
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