LAWMAKER WANTS LOCAL GOVERNMENTS TO STOP BILKING SMALL BUSINESS
|| By FITSNEWS || For those of you unfamiliar with South Carolina politics, “The Quinndom” (a.k.a. the political organization run by veteran consultant Richard Quinn, Sr.) is the state’s most influential political empire.
Unfortunately, despite it’s “Republican” label – it is rarely a source of pro-free market, pro-liberty policy.
This week appears to be the exception to that rule, though.
S.C. Rep. Rick Quinn, Jr. – the crown prince of the “Quinndom” and one of the most influential lawmakers at the S.C. State House – has rolled out legislation that seems right up our alley.
Specifically, Quinn wants to cap the amount cities and towns can charge on business license fees – which are routinely abused by corrupt, money-hungry local municipalities.
Like you, we’ve heard many of the horror stories related to the unfair imposition of these fees …
For example … a carpenter is in the midst of fixing a broken porch rail for a neighbor when a city bureaucrat rolls up and demands to see his license. The carpenter, of course, doesn’t have one – so he gets popped with a fine. Not only that, the city demands a cut of his take.
According to Quinn, the current licensing system is “grossly unfair and an outrageous assault on small business.”
“When you pay a license fee based on gross rather than net income, small businesses that are losing money or barely making ends meet are being forced to pay what amounts to a tax on their business expenses,” Quinn said.
And since the costs of state and federal taxes are included in the fee calculation, “cities are literally taxing the money businesses use to pay taxes.”
Not only that, municipalities routinely impose arbitrary “classifications” aimed at protecting certain businesses – and penalizing others.
“This system empowers city revenue collectors to soak certain businesses and give favored treatment to others,” Quinn said.
Quinn’s legislation – dubbed the “The Business License Tax Reform Act” – would scrap the current system and impose several strict guidelines on municipalities imposing business license fees.
Among them?
- All businesses will be treated equally in the calculation of business license fees. Multiple “classifications” with different rate structures would no longer be allowed.
- The license fees assessed will no longer be based on gross income. License fees will be based on annual net earnings or profits of the businesses, a number that is readily available on business tax returns.
- There will be a cap of no more than $100 annually for business license fees.
According to Quinn, his reforms would amount to an annual tax break of around $240 million – money that would be kept in the state’s economy as opposed to being sucked up by local bureaucracies.
Naturally, we support such an effort. That’s a big chunk of change that could help empower the state’s consumer economy and actually create jobs – you know, as opposed to paying for jobs.
In fact, we don’t care one iota if critics of Quinn’s bill refer to it as a violation of “home rule” – or a local government’s right to set the tax and fee rates it deems appropriate. Our view on home rule is simple: If invoking it reduces taxes, fees or government spending, we’re all for it. But if it raises taxes, fees and government spending – we’re against it.
Is that a little bit hypocritical? Probably … but like Quinn we’re sick and tired of seeing so many South Carolina small businesses get the shaft.
We support Quinn’s effort to regulate South Carolina’s unfair municipal business fees. Hopefully both the S.C. House of Representatives, the S.C. Senate and governor Nikki Haley will join him in his bid to reform the system – and provide nearly a quarter of a billion dollars in tax relief to those businesses who need it the most in the process.
36 comments
Our view on home rule is simple: If invoking it reduces taxes, fees or government spending, we’re all for it. But if it raises taxes, fees and government spending – we’re against it.
What a simplistic mentality, you can really just boil it down to “LESS TAX GOOD, MORE TAX BAD.” It’s this kind of mentality that leads to massive “fiscal conservative” deficits like the one choking Kansas.
But it’s OK! Shortfalls by the hundreds of millions? Just cut education!
You left out road repair too.
Yeah, so much better that government at any level be allowed to reach into our pockets as deeply and as many times as they like for funds to squander on themselves, their friends, or both, rather than stay within a budget and spend what they take from us wisely.
They know better than we how our money is best spent.
That is the whole point. Who decides what taxes and fees are wise. Quinn thinks the state legislature can best decide, not local government which is closer to the people. Really, this is just an effort by business interests to push more of the cost of operating local government onto the general public. As a business owner, I can sympathize, but I can still be honest as to what this is all about.
One positive to pushing decisions to a local basis is that it’s harder for corrupt/crooked corporations to payoff/bribe politicians because they have many more pockets to fill/people to see when the projects are pushing down to a local level. IMO, decentralization is a good thing…
So you would oppose Quinn’s bill?
It all depends on whether the taxes are going up or down…if down, yes.
I think it’s hard to tell without reading any given bill as usually they are simple swapping one form of taxation with another.
*If down, I support any bill that does so(Quinn’s bill if it actually does that-who knows)
So much for the Kansas Miracle. Massive tax cuts targeted at the wealthy have produced none of the promised benefits. But how can that be? Mr. Laffer assured us it would work.
http://politicalwire.com/2015/01/16/brownback-proposes-tax-hike-despite-rhetoric/.
Voters must be happy. They just re-elected their Republican senator and governor!
I am just amazed how liberal socialists don’t get it and see how the Democratic Party has been wiped out the past 6 years including in the state legislatures.
Carry on my wayward son…their will be a Republican President in 2016 when we are done…KANSAS!!! LMAO!!!!
Maybe, but unless they are a dumb as SC voters (which they may be) when the tax increase is passed, they will see that Brownback and his cohorts almost drove the state into bankruptcy and were forced to slash spending on education to the point they were sued, all in order to avoid raising taxes before the election. Now that the election is over they will raise taxes. All in all typical Republican tactics. Bait and switch.
Indeed, Brownback has now submitted tax INCREASES in Kansas, after saying in the campaign that it would not be necessary. All of his new taxes will fall only on the lower and middle class. The income tax cuts for the wealthy are not being adjusted under his latest proposal.
Tell the WHOLE truth vic!
TOPEKA
Gov. Sam Brownback declared the state would continue its “march to zero” on income taxes during his State of the State address on Thursday.
Here are YOUR taxes:
Taxes on a pack of cigarettes would nearly triple from 79 cents a pack to $2.29 per pack. And taxes on liquor would rise to 12 percent from 8 percent.
Guess the only people it hurts are drunks and chain smokers.
The working class pays those taxes in disproportionately higher numbers than the wealthy.
The proposed cigarette increase would mean that if a person smokes a pack a day, the state would collect an extra $547.50 per year.
The governor also wants 50 percent reductions in existing income tax deductions – including for property taxes and for home mortgage interest – to occur this year instead of in 2017. That would generate an estimated $72.1 million over the next two fiscal years. [reducing a deduction is in effect a tax increase].
The proposal would divert funds for highway projects to general government programs and delay the elimination of a long-term funding gap in the pension system for teachers and government workers. [does that sound fiscally irresponsible? ]
Read more here: http://www.kansas.com/news/politics-government/article6952787.html#storylink=cpy
Can you spell gerrymandering?
Hey Torch…tell me how the fuck you ‘gerrymander’ a national senate seat and governorship?
Kansas is in such bad shape the voters just re-elected their Republican senator and governor.
LMAO!!!
“It’s this kind of mentality that leads to massive “fiscal conservative” deficits like the one choking Kansas.”
Is it the spending that leads to the deficits or the “lack” of tax money?
Where do you think the money goes if it is no longer being sent to the “govment”? Do you think all those business owners put it all under the mattress? Of course not, they spend it at the local shoe store, furniture store or maybe invest it to grow their own business which, in turn, creates more private sector jobs. Unfortunately, our local, state and national tax base has grown past the point for which taxes were created. And if you don’t believe there is such a dollar figure, then you are a Socialist.
Smirks, you left out road repair too.
Sounds like good common sense to me. I hope Mr Quinn successful in getting this passed, as is!
I wonder how many TEA toads stopped reading you today? Cut taxes on businesses and take a dump on the individual taxpayers? Ha! Ha! No wonder you and Haley were in bed together! You think alike! You gonna write two more stories like you did brown nosing Donald Trump? BTW, did he let you kiss his ass?
Kiss his ass?! He gave him a rim job.
I’m always for reducing taxes…but I smell a skunk on this one for some reason. First, I really don’t hear of many business owners bitching that business license fees are driving them out of business….so my question is…why all the hubbub on this?
I mean really, if you want to help small business owners profit and employ more people you could start by reducing SUTA and business property taxes…the license fees are a pittance compared to those other two taxes. (in my business anyway)
The problem is the “license” fee is based on gross income with business types being classified into group with different rates. A professional business (doctor, dentist, accountant, lawyer, etc.) will pay a higher rate than a retail business (convenience store, bar, etc.) while not requiring the municipal services necessary for the retail business (i.e., law enforcement,).
Seriously though, what are we talking about in fees? If I do $1million a year in business(gross) in Lexington what’s the cost? $1000 or so for most businesses? That doesn’t seem like a make or break it to me versus consideration of property/SUTA taxes.
It’s classic grandstanding. Who doesn’t like the sound of “helping small businesses”? Nobody will ever check behind him to see if this measure actually helps a single small business, but when it’s time for reelection he can say “I introduced legislation to reduce taxes on small businesses.” And the lemmings will clamor to pull that straight R. Again
I’ve always been opposed to business license fees on principle. I just don’t think you should have to pay the government to operate a business. So, I am glad to see any form of opposition to these fees. However, I see problems with this approach. The municipalities currently set fees as a percentage of only the sales within their jurisdictions. How are they going to figure out what percentage of a business’s profits come from their jurisdictions? If a business has customers in a dozen different towns, all buying different amounts of goods and services and each with its own cost structure, untangling the correct amounts to pay for each license could require some serious accounting work.
I do like the $100 cap on fees, but of course the municipalities will see this as a goal rather than a limit and just charge every business the full amount.
If you cut out $240mm in revenue from Business Licenses, they will simply raise property taxes to make up the difference. When the state faces higher costs, they simply reduce the aid they provide to cities and counties. In other words they just push off their pain to the government below them. The local governments can only cut expenses or raise taxes. Some small part might be cut in expenses, but most of it would be made up with property or sales taxes.
With Act 388 local governments cannot raise taxes to offset the decrease in revenue due to the potential impact of the proposed legislation. For most local governments, business license revenue now represents approximately 30% of their revenue stream. Act 388 limits tax increases to CPI and population growth, so around 1-3% annually. This bill would gut local governments across the board in all departments: police, fire, public works, etc.
If you want Rick Quinn’s attention, just show up with a box of donuts. The fat bastard’s eyes will glaze over.
Another State government bait and switch. Check into the authorizing legislation from may years ago that established the Local Government Fund. The State legislature, in all of their willingness to help, decided to start collecting taxes on behalf of municipalities and counties to make it easier on the citizens. Pay one tax, one time, and the State would send the revenue where it should go.
The State saw that as a cash cow when the economy tanked and has been raiding the fund ever since. Municipalities and counties have attempted to make up the difference (in the money that the State has taken from them) through the business license fees. Apparently, the State saw that they were getting shafted in the “fee collection” side of the transaction and want to get more of the money.
If the State would get out of municipal and county government, the business license fees, and property taxes would probably stay low. After all, in local elections there is a turn out of 10% of the (voting) population is electing the people that set tax and fee policy. What more local control could Rick want? And (as the founding editor of this esteemed publication has discovered) it is relatively easy to relocate a business outside of a city limit.
Keep your hands out of local government, Rick.
From my experience, local governments are typically the most corrupt forms of Government, notwithstanding the governmental charade and sham that is the Federal Govt. Just because something is smaller doesn’t make it any less evil and a cash whore… after all, look at the recent sheriff situation in Lexington. Speaking of Lexington, think a well known developer doesn’t essentially own the County Council and School Boards?… ha, think again…
Another State government bait and switch. Check into the authorizing legislation from may years ago that established the Local Government Fund. The State legislature, in all of their willingness to help, decided to start collecting taxes on behalf of municipalities and counties to make it easier on the citizens. Pay one tax, one time, and the State would send the revenue where it should go.
The State saw that as a cash cow when the economy tanked and has been raiding the fund ever since. Municipalities and counties have attempted to make up the difference (in the money that the State has taken from them) through the business license fees. Apparently, the State saw that they were getting shafted in the “fee collection” side of the transaction and want to get more of the money.
If the State would get out of municipal and county government, the business license fees, and property taxes would probably stay low. After all, in local elections there is a turn out of 10% of the (voting) population is electing the people that set tax and fee policy. What more local control could Rick want? And (as the founding editor of this esteemed publication has discovered) it is relatively easy to relocate a business outside of a city limit.
Keep your hands out of local government, Rick.
The rate on a license tax can be made lower, and should. But a business license has to be on gross income. Otherwise a massive business like BMW would pay NO business license tax, but the guy at the gas station right off Highway 10 at the entrance to BMW would be paying substantial money.
BMW has paid no corporate income tax EVER, according to what I am led to believe. All its promises to pay, eventually, have been subsumed by the brilliant advice it has gotten over the years from tax lawyers in this state, so that the plant has never shown a profit in SC. that is tantamount to no net income, but a TON of gross income.
This is info about 10 years old, but I doubt it’s changed.
They tried this in Chester county – the impact is the current leadership is in an election runoff for his political life.