See what happens when you wade into politics…
Yesterday, I wrote about the backlash Delta was facing over its convoluted stance on the National Rifle Association. In response to the recent Florida school shooting, Delta removed its group discount for the NRA. Facing backlash, it issued a statement proclaiming that it was “neutral” in the gun debate but “supports” the Second Amendment (the right to bear arms).
> Read More: In Eliminating NRA Discount, United and Delta are Taking a Stand
But now the backlash has intensified and Georgia’s Republican-controlled legislature is threatening to block a lucrative fuel tax cut unless Delta restores its NRA discount.
I will kill any tax legislation that benefits @Delta unless the company changes its position and fully reinstates its relationship with @NRA. Corporations cannot attack conservatives and expect us not to fight back.
— Casey Cagle (@CaseyCagle) February 26, 2018
Casey Cagle is Georgia’s Lt. Governor and President of the Georgia State Senate.
First Issue: Is this Legal?
Can a legislature condition funding on satisfying actions?
The LA Times offers contrasting legal views.
Erwin Chemerinsky, dean of the UC Berkeley School of Law focused on the chilling effect such action would have on Delta’s First Amendment right.
Of course, the government official has the right to free speech. But punishing a company (or person) because of its political actions raises very serious First Amendment issues. It is hard to evaluate at this stage, but for the state to penalize Delta for its political stance would be very problematic under the First Amendment.
But Eugene Volokh, a professor at UCLA Law School, sees no problem the legislature denying Delta a tax cut–
They may be playing political hardball, but that’s not a 1st Amendment violation… Contributing money for the purposes of speech is protected by the 1st Amendment. If the government can limit the use of money for purposes of speech, it will be limiting speech. [But] spending money in other contexts — or choosing not to spend money, or choosing not to give a discount in an economic transaction — is completely regulable by the government, broadly.
I think Volokh makes the better legal argument. Government officials cannot regulate political speech, but they can regulate a company’s commercial activity. Whether that is a good idea or not is not my point.
Second Issue: Delta’s duplicity on subsidies
I love exploring the First Amendment concerns surrounding this issue, but the more important matter: what the heck is Georgia giving Delta a tax cut for?
Here, Delta stands to save $50 million each year through reduced fuel taxes courtesy of the Georgia tax payers. These subsidies are under the guise of bringing additional air service to the state. By not taxing airline fuel, the Georgia legislature hopes to attract flights and more airlines.
We can argue over whether Delta “deserves” this tax break or not. We can question whether a carrier flush with cash who even owns it own refinery in the Commonwealth of Pennsylvania, needs assistance from the state.
But that’s not the point. The point is hypocrisy.
For all it’s protest over Middle East subsidies, Delta has never seen a tax cut or subsidy it did not like. It berates competitors for “unfairly” accepting state aid, but has never turned down sate aid itself. It condemns Gulf Carriers as job thieves, even though they spend billions of dollars on Boeing jets, while investing in Airbus aircraft for its new flagship product.
Oh, the Georgia legislature should be careful indeed. With 33,000 employees, Delta is the largest employer in the state. Delta has also done tremendous good for the state and its citizens in offering convenient and reliable air travel. But I don’t ever want hear another subsidy argument from Delta again.
CONCLUSION
Mark this story as developing. It fascinates me and represents a juicy intersection of the law and travel. If I’m a betting man, I expect Delta to make a conciliatory gesture, perhaps even the restoration of its NRA corporate discount, in order to secure its lucrative tax break on fuel.
image: Delta
The No. 1 principle of conservatism is for the government to stay out of the private sector. The issues between Delta and the NRA are entirely within the private sector. The Georgia officials threatening this action are self-professed conservatives but such an action is the definition of anti-conservatism, making them false conservatives.
From what I’ve been reading, there’s more under the surface than meets the eye. It appears several Rs in the Georgia legislature had issues with this tax giveaway even before the NRA kerfluffle. Now DL’s NRA stance gives them cover to oppose it. “We’re not opposed to economic development, but we’re going to stand up for the values of Georgia voters when big corporations ignore you to kowtow to Nancy Pelosi!” It’s an election year, and in a deep red state outside Atlanta, it’s a political ad that writes itself in many legislative districts. Delta clearly didn’t think about that before acting.
Personally, I don’t really see how anyone can force a state legislature to offer tax incentives. It’s been well established in tax law that any deductions, credits, incentives, etc. are a matter of legislative grace, and are solely under the purview of the governing body, in this case the Georgia legislature since these are state-level taxes. The legislature can terminate (or choose not to offer) tax rebates and incentives for any reason whatsoever. Whether this particular use of political power is a good thing or not is a matter for the voters of Georgia to decide.
I’d like to see Delta lose the fuel subsidy just so they will shut about the ME3.
Citizens United already addressed this. Under that ruling, Delta is being extorted. That’s the law and the precedent established by conservative Supreme Court justices.
Don’t get me wrong – I love it when right wingers end up eating their own cud, but this is just one more reason that decision needs to be overturned. All corporate interests should be removed from government. Basically this entire situation is “who has more power over the Georgian legislature, Delta or NRA?”
https://en.wikipedia.org/wiki/Citizens_United_v._FEC
Citizens United was about regulation of political campaign speech. Can you help me understand why you think Citizens United addressed this?
I disagree that Delta will make a conciliatory gesture. Maybe a small one but they won’t put the NRA discount in place. Delta is a good airline, but has a history of being arrogant, petty, and stubborn when pushed. This is the same company that as a condition of being a sponsor of two different pride parades banned other airlines from marching in the parades with strict enforcement. When Qatar Airways rented theatre space in Atlanta Delta promptly cancelled their sponsorship. Delta will win this one way or another. Even if they would give in and renew the discount Delta will have a long memory and will get it’s revenge at the right time. It’s not that Delta may even care that much about gun control itself their just petty.
The issue that I see that broadens this from a simple free speech issue to one of discrimination based on political beliefs. Does Georgia have the right to block this because Delta is not supporting a conservative group, as the Lt Governor tweet implies? I don’t see a strong case for Georgia in that regard, especially as the group in question has donated to the Lt Governor.
Even if there’s a first amendment issue with vetoing a tax break for a company based on its expressed political views that doesn’t mean it’s justiciable.
Also I am not familiar with Georgia law on the subject but in Texas a governor’s veto is not reviewable. An indictment of Rick Perry over his threatened use of a veto to cajole official action was dismissed in part for this reason.
The valid question is, ‘should we be concerned with politicians choosing to grant favors or not based on the political expression of companies?’ It’s odd to see folks who normally wouldn’t support the speech rights of corporations in a campaign finance context come to their defense here. I’m more sympathetic to this concern generally, but also realize POLITICIANS DISPENSING FAVORS TO PREFERRED GROUPS IS THE VERY ESSENCE OF OUR POLITICAL SYSTEM. It may be distasteful but the only way to stop it is for the government to have fewer goodies to dispense.
I agree that this should be a broad bipartisan concern, but your conclusion is absolutely correct. This is how politics works in the USA.
There’s a third issue, the duplicity of R politicians on tax cuts for corporations. Isn’t this supposed to be done in the name of business growth and more jobs? But wait, NRA is more important than success of a major local company? Something doesn’t add up. Maybe the republicons are lying about tax break motivation, and any tax cut for Delta is pure profit for the top.
Matthew, I appreciate your public impartiality. I’ll be a daily visitor now. Thank you.
Is this why Delta has been pouring so much into SeaTac Airport? Does Delta see friendlier skies out Seattle way? Georgia has a lot more to lose than Delta does in this argument. You don’t treat your state’s largest employer like a puppy who just chewed up a shoe.
I think DL can drop the NRA discount if it wants (was that just on convention travel? I never found those to be good deals anyway, and thought they had pretty much disappeared) and I think Georgia can cut DL’s tax breaks if it wants. It is all fine.