The DeMint factor

In a down-to-the-wire Senate race in South Carolina, right-winger Jim DeMint is running on major tax reform. Yet he fails to pay his own taxes on time and has been slapped with liens by the IRS.


Joe Conason
October 8, 2004 4:31AM (UTC)

Among this year's Republican Senate hopefuls, Jim DeMint of South Carolina is surely the most eager promoter of right-wing economic orthodoxy. With the zeal of a true believer, the House member from Greenville has declared that America's future depends on privatizing Social Security and abolishing the federal minimum wage.

Now his unlikely notion of "tax reform" -- scrapping the income tax and substituting a 23 percent national sales tax -- has become the central issue in his race against Democrat Inez Tenenbaum. (The president endorsed DeMint at a campaign rally last August, causing a brief uproar before the White House disavowed the candidate's ill-advised remarks.)

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While DeMint's enthusiasm for such conservative nostrums has drawn support from Republican financiers on Wall Street and in Washington -- as well as rave reviews from the Wall Street Journal editorial page -- the potential consequences of his policies for average taxpayers have alarmed South Carolina voters of all political persuasions. Even many conservative economists tend to regard the national sales tax as an unworkable idea whose time should never come.

While DeMint dreams of imposing a national sales tax, he also likes to imagine abolishing the Internal Revenue Service. Many politicians claim to hate the IRS, of course, but DeMint's difficulties with federal, state and local tax authorities may lend a personal edge to his animosity.

South Carolina court records obtained by Salon show that from 1987 until as recently as 2001, DeMint has repeatedly failed to pay his taxes on time, forcing the Internal Revenue Service and the South Carolina Tax Commission to file liens against him and his company, DeMint Marketing Management. In some cases, despite numerous warnings, DeMint has delayed payment for years. If he harbors a special hostility toward the IRS, that might reflect the $1,050 lien in 1987 for overdue taxes against him and his company -- which he neglected to pay for more than three years.

In 2001, DeMint's tax troubles briefly became a public issue in his hometown. Although he boasts of having "never voted for a tax increase" during his three terms in Congress, DeMint endorsed a local property tax increase in Greenville, whose public schools desperately needed additional funds.

When the Greenville News revealed on May 5, 2001, that the DeMint had failed to pay $1,033 in property taxes owed on a vacant lot, opponents of the tax hike were outraged. A leading opponent of the tax increase castigated DeMint for "big-time hypocrisy" as an advocate of higher taxes when he hadn't paid his own in full yet. "I was going to pay it when I got home this weekend," DeMint told the Greenville News.

DeMint quickly paid up after he was embarrassed by the newspaper's revelation, offering an excuse that he hadn't received timely notification of the overdue property taxes. But his neighbors were upset with their congressional representative. "I can't get over these people not paying taxes and trying to raise taxes on other people," complained the president of the Greenville County Taxpayers Association, which campaigned successfully to kill the tax hike in a subsequent referendum.

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DeMint's troubles date back to March 1987, when the IRS filed a lien for $1,050 in overdue taxes against James W. DeMint and DeMint Marketing Management Inc. He didn't satisfy the lien until October 1990, more than three years later. During that period, the South Carolina Tax Commission also filed two liens against his company. The first, filed in October 1987, sought payment of $919 and was withdrawn three years later; the second, filed in November 1988, demanded $1,273, which DeMint paid a few months later. His campaign press office didn't return a call from Salon seeking comment on his policy views and tax-payment history.

DeMint was elected to the House in 1998 to represent the small-town and rural Piedmont district, traditionally dominated by non-union textile mills but lately the site of foreign manufacturing investment, attracted by relatively cheap labor. He is running to succeed Fritz Hollings, who has been the Democratic U.S. senator since 1966. His opponent, Tenenbaum, who was elected state superintendent of schools in 1998, is a former public interest and environmental lawyer.

Over the past several weeks, Tenenbaum has pointed out that DeMint's plan for a 23 percent national sales tax would result in higher rates for middle-class families -- indeed, the bill he sponsored would raise taxes for 95 percent of all taxpayers. By focusing on DeMint's regressive tax scheme, Tenenbaum has become competitive in one of the country's most conservative states. A Democratic poll taken in late September showed her coming from behind to pull slightly ahead of DeMint, 46 to 43 percent. (Other polls show the race either a tossup or DeMint slightly ahead.) An unexpected Democratic victory in heavily Republican South Carolina could shift control of the Senate next year.

Finding himself on the defensive, DeMint has suddenly played the gay card, proposing on Oct. 4, in the first campaign debate, to ban all gays from teaching in public schools. He has refused to participate in voter forums conducted by local gay groups. After a gay and lesbian organization requested his attendance at an event, DeMint's director of campaign operations, via e-mail, admonished a campaign worker for not turning down the invitation. "Come on ... give this dike a reply," she wrote. Disclosure of the e-mail forced DeMint to admonish his campaign director publicly, and she apologized but was not dismissed.

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During the debate, Tenenbaum repeatedly cornered DeMint on taxes, Social Security and homeland security, but he kept raising the specter of the gay menace. "We need the folks that are teaching in schools to represent our values," he said. Tenenbaum replied: "To say that a homosexual can't teach in a public school is really a bad thing, and it's just un-American." But DeMint's abrupt emergence as a gay-baiter appears to be little more than an opportunistic campaign ploy -- presumably dictated by frustration over the unpopularity of his tax scheme, which is closest to his heart.

If DeMint's own past tax problems seem penny ante, his reluctance to pay symbolizes far more serious budgetary contradictions that have haunted the Republicans ever since they took control of Congress in 1994. These self-proclaimed "fiscal conservatives" love to spend money -- in fact, they are the biggest deficit spenders in American history -- but won't raise the revenue to pay for their profligacy. They complain constantly about government spending, while boasting to constituents about every scrap of pork they bring back to their districts.

In that respect, DeMint is a typical Republican member. On his congressional Web site, press releases that urge harsh budget cuts are sandwiched between announcements taking credit for millions in new federal grants devoted to job training, school funding, housing subsidies, rail reconstruction, environmental studies, academic research, and all the other flavors of congressional pork that conservatives routinely denounce. Indeed, DeMint may be slightly more hypocritical than most of his colleagues in the House majority, since he was among 14 members who signed a letter to Speaker Dennis Hastert last December that admonished the leadership for "deserting conservative fiscal principles."

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Back when he was a freshman in the House, DeMint hosted a "Tax Day" event that perfectly captured this kind of phoniness. On April 15, 2000, at a college in Greenville, he staged a Toss the Tax Code Rally. The event concluded with a marvelous stunt reminiscent of "The Wizard of Oz." Ascending in a hot-air balloon, DeMint threw out pages of the IRS Code, which fluttered down onto the heads of his constituents like confetti. To fund this celebration of tax cutting, the House member used $800 of the taxpayers' money. He didn't pay a dime.


Joe Conason

Joe Conason is the editor in chief of NationalMemo.com. To find out more about Joe Conason, visit the Creators Syndicate website at www.creators.com.

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Jim Demint, R-s.c.

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