Crony capitalism drives the Haslam gas tax plan

by | April 13, 2017 7:12 am

Last Updated: April 13, 2017 at 7:28 am

Language of Liberty – By Steve Gill

The Haslam Administration is doling out over $113 million in tax CUTS to some of Tennessee’s largest corporations to justify over $350 million in tax INCREASES on working Tennesseans. According to the Times Free Press, just 24 large manufacturing companies will each receive tax breaks of over a million dollars a year under the Haslam plan. Those two-dozen companies will reduce their tax burden by over $57 million and receive OVER HALF of the proposed $113 million in Franchise and Excise tax reduction.

Tennessee law doesn’t allow the state to release the specific identities of the 24 companies that will benefit most from the Franchise and Excise tax cut. However, according to the Times Free Press certain companies that fit the profile of those who are most likely among the 24 sharing in the $57 million tax break include Nissan, Volkswagen, and General Motors.

“This whole tax scheme appears to be built upon a foundation of special treatment for the Governor’s friends while sticking it to ordinary working Tennesseans,” according to State Rep. Judd Matheny. “Before the plan moves one step forward there needs to be full and complete disclosure of who exactly stands to benefit, and how much they have invested in campaign donations and lobbyists to get those special benefits.”

This is not the first time that the Haslam Administration has provided special tax favors to some of the largest corporate entities in the state, including those with whom he has a personal and financial relationship. Less than two years ago, the Haslam Administration promoted and passed a huge “user fee” jet fuel tax break to Memphis-based FedEx, whose Chairman Fred Smith sits on the Board of the Governor’s family business Pilot/Flying J, shortly before embarking on the effort to impose a huge fuel tax increase on Tennessee drivers. The special tax break on aviation fuel was specifically limited to FedEx, and reduced the taxes paid by the company by about $10 million in the first year and will reduce the annual taxes paid by FedEx by over $20 million a year by year four.

Additionally, Jones Lang LaSalle has received what appears to be favorable treatment from the Haslam Administration in various contracts awarded over the past few years. Nashville’s NewsChannel 5 has reported that the Governor did at one point have an ownership interest in the company and efforts to determine whether that ownership stake continues to be held in the Governor’s “blind trust” have been blocked. The Haslam Administration has recently awarded the giant real estate company yet another contract to manage state university properties. Might be time for an updated story from NewChannel 5.

“The special favors business for insider corporate cronies and friends of the elite in Washington has clearly made its way to Tennessee,” former State Representative Joe Carr says. “It is time for the mainstream media to spend some time exploring the way the Haslam Administration is doing business with taxpayer dollars that always seem to flow into the pockets of the Governor’s closest friends and business partners.”

There is also significant overlap among the 16 lobbyists registered as representing the Tennessee Infrastructure Alliance, one of the strongest proponents of the Haslam IMPROVE Act, [deceptively re-named] the “Tax Cut Act of 2017”, and clients of those same lobbyists who are among the largest beneficiaries of the Franchise and Excise tax cut. It is not clear how much of the funding that is promoting the tax plan is being sourced by those companies, including funds provided by the employers of the invisible array of “consultants,” such as former Lt. Governor Ron Ramsey. Consultants are not required to report clients and expenditures like their lobbyist colleagues, and are not easily connected to the limited number of companies who will receive the largest benefit from the Haslam plan.

With the identities of the companies receiving over half of the Franchise and Excise tax cuts being kept hidden, and the details of the Governor’s own investment portfolio remaining secret, it is impossible to determine whether or not Governor Haslam stands to personally profit from the tax plan that he is advancing. With the track record of inside deals financially benefiting those closest to Governor Haslam, if not the Governor himself, it is time for the mainstream media in Tennessee to apply serious scrutiny to the [insidiously labeled] IMPROVE Act, “Tax Cut Act of 2017”. At this point the Act seems primarily designed to cut the taxes of the corporate elite in the state and “improve” their bottom line at the expense of regular working Tennesseans who will pay the price at the gas pump [and through higher costs of transported goods]. Transparency is completely lacking in this process, and is time for the spotlight to shine and reveal what is really at play.

Steve Gill is an attorney and a political analyst for WKRN News 2 (ABC) in Nashville, former host of the Steve Gill Show, and has made appearances as a political commentator on Fox News, CNN, MSNBC and other media outlets in the U.S and abroad. Gill served as Director of Intergovernmental Affairs for the U.S. Trade Representative in the Executive Office of the President under both the Bush and Clinton Administrations.

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