Republican lawmakers in Georgia are threatening to block a tax benefit for Delta Air Lines because they disagree with the company's political stance on the National Rifle Association.
Delta is reaching out to the NRA to let them know we will be ending their contract for discounted rates through our group travel program. We will be requesting that the NRA remove our information from their website.— Delta (@Delta) February 24, 2018
There are indications he will have support from his colleagues in the state Senate to do just that, despite the fact that the state House approved the tax break, which would benefit one of Georgia's largest employers.
The fight in Georgia has made national headlines, but President Trump has been silent on the issue. There's reason to believe he may chime in. On one hand, the president has been leaning more into pro-NRA policies since the Florida high school shooting, but you could also argue that Georgia lawmakers threatening a company contradicts the president's attempt to be more pro-business.
But can the government use its power to punish a private company over that company's politics? It's ethically questionable, ethics experts tell The Fix, but probably, yes. For some, this decision recalls the actions of state governments in the South when they punished those taking stands for the civil rights movement.
But what Georgia politicians are considering doing is possibly legal, experts say. Not only that, but it's also something that probably happens in legislative bodies across the nation all the time.
At the heart of this debate are two competing issues: the First Amendment and the government's authority to levy taxes. The government can't target or discriminate against a person or corporation based on political speech, but the government also has broad discretion about whom to tax and when, said Emory Law School Dean Robert Schapiro.
Legally, Georgia lawmakers are under no obligation to give a tax break to Delta. The break in question, on a jet fuel sales tax, was implemented only in 2005 after Delta was on the verge of bankruptcy.
Today, Delta is turning a profit, and lawmakers rescinded the tax break in 2015. (Though some critics point out that 2015 is also the year when Delta's then-chief executive testified against a bill on religious freedom. The bill was defeated in the legislative session that year. It passed the next year but was vetoed by Georgia Gov. Nathan Deal (R) under heavy pressure from the business community.)
Schapiro said a clearer quid pro quo — you said this; therefore, the government is doing this to you — would probably be needed before any legitimate legal challenge can be mounted. “If the Georgia legislature said, ‘We're going to impose a tax against people who speak out on gun control, or a tax against people who say they oppose the NRA,’ that would clearly be unconstitutional,” Schapiro said.
While Georgia's lieutenant governor (who is considered a front-runner in the open governor's race in November and didn't respond to a request for comment) is drawing a clear line between Delta's NRA decision and the jet fuel tax, other GOP lawmakers have opposed the tax for other reasons, so it could be difficult to point to a clear motive behind their votes.
State Sen. Michael Williams (R), also a gubernatorial candidate, called the tax “corporate welfare.” “Delta is making billions of dollars,” Williams said on CNN on Tuesday. “Why do they need a tax break?”
While this might be legal, that doesn't mean any of it is ethical, legal experts said. But it's also not unusual.
“I'm not sure they are doing something unusual,” said D.C.-based ethics expert Melanie Sloan, adding that it doesn't make it okay. “Legislatures all the time target folks they like or don't like; they give them benefits, give them tax breaks or don't give them tax breaks.”
The decision is especially haunting for some critics, given Georgia's past opposition to leaders of the civil rights movement.
“We see this in the context of the civil rights movement,” said Andrea Young, executive director of ACLU Georgia, which criticized the decision to oppose the jet fuel tax break. “There were boycotts. The state retaliated against organizations and even some people.”
No one is arguing that a fight over a jet fuel tax will suddenly throw Georgia back to the Jim Crow era. But ethics experts characterize the blowup as a troubling retaliation based on what lawmakers such as Cagle perceive as best politics, not best policy.
“Obviously, you should be deciding on a tax break for Delta on whether or not it is a good decision for Georgia,” Sloan said.
Punishing Delta may also not be the best way for the state to draw in businesses, some critics warn. Atlanta made the list of 20 metropolitan regions where Amazon could put its second headquarters. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
And if there's one thing that conservative lawmakers pushing controversial legislation have learned in recent years, it's that the weight of the business community can bend an entire political conversation, and it even has the power to lead to movements that oust governors. In November, North Carolina's Republican governor became the first sitting governor in that state's history to lose reelection — after he approved a bill limiting which public restrooms transgender people can use. Major employers in the state, from American Airlines to Dow Chemical, opposed the law. Factories reneged on deals to open plants in the state, and businesses canceled their conventions there.
In other words, the influence of politics and business goes both ways.