The following is an editorial written by State Senator John Douglas on the Georgia FairTax.
The “Georgia Fair Tax” & Illegal Immigration
During the course of the 2006 Georgia legislative session, your state House and Senate passed a strong anti illegal immigration measure in Senate Bill (SB) 529. The bill puts the burden on not only those here illegally, but also those who employ them. I was pleased to vote for the bill and enthusiastically support it.
However, illegal immigration continues to be primarily a federal problem. We cannot round up illegals in Georgia and deport them do another state or country. We can also not afford to shut down our state economy by forcing these people out overnight. We didn’t get into this situation overnight and wont get out of it in that time period. Homebuilding, agriculture, chicken processing and carpet production are four areas that would suffer greatly if there was a sudden outflow of Hispanic labor. All of those industries are vital to the economy of our state.
So with that in mind, what are we to do? First, the US government must get control of the border. A continual flood of illegal immigrants negates everything we are trying to do here in Georgia. Secondly, there can be no amnesty for those breaking the law. “Illegal” means just that. No fuzzy areas, no doubt, no waffling on the law. Enforce it.
At the state level, while these illegal immigrants are still here, they continue to use public facilities just as honest taxpayers do. Roads, schools, hospital emergency rooms, parks and other areas suffer wear and tear from everyone, not just American citizens. Unfortunately, under our current tax laws, its only honest American paying for the benefits of our society. That has to change. Those being paid in cash to avoid government scrutiny and income taxes must be brought into the system.
As a result, I am proposing the “Georgia Fair Tax” which would eliminate the state income tax and replace it with a 4-5 cents sales tax. There are two great reasons for the proposal. First, it brings everyone in Georgia into the equation for paying their share of the upkeep of our state. No longer would working for cash exempt you from the taxes honest citizens are paying. No longer would those living within the law carry the financial burden for those outside the law. Everyone, from the illegals to drug dealers to the most honest citizens would immediately begin paying their fair share.
The second reason a Georgia Fair Tax would be important is because it coincides with what Congressman John Linder is doing in Washington. For several years, Linder has worked to eliminate the federal income tax in favor of a national sales tax. What better example for us to set than for him to be able to point to Georgia and tell the country, even my own state has now gone to a fair tax.
The time has come to make this change. Ten states currently have no income tax. Georgia has to become number 11.
However, being a Senator means I can’t introduce the legislation myself. Our Constitution requires all revenue bills begin in the House of Representatives. As a result, what I intend to do is use my Senate position as a “bully pulpit” to push this idea and work to see it implemented. Just as John Linder has encountered steadfast, entrenched bureaucrats in Washington, so too will I in Atlanta. But I intend to keep working and get the idea across to my colleagues at the capitol that the time has come for this and the burden of paying for Georgia has to be shared by all.
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Noted on Boortz website:
BY THE WAY!
A listener pointed this out to me yesterday. If you eliminate the spaces in “The IRS” you come up with “theirs.” Ironic, don’t you think?
Even if the Fair Tax cannot work for GA, we ought to at least study the implications of implementing it or the Flat tax over what we have now.
Joeventures, it’s not socialist at all. It’s simply not paying tax on necessities. While it may “feel” socialist, it isn’t. Redistributing income that forces those who achieve in life to pay for those who don’t…
Your use of the word “doled” in this situation is incorrect. It’s not a welfare check because it’s not redistributed income.
Joeventures,
The monthly “stipend” is not anymore socialist than the annual tax return is. This check is merely a tax return on essential items that you must purchase for the basic necessities of life.
I have read all of this with great interest.
When I was in college at North Georgia, I would drive up to the Woody Gap fire tower to talk on my amateur radio. On one trip I found a locked gate across the gravel road to the summit. Whe I asked the ranger in Dahlonega why the road had been closed, he said it was because people were going up there and leaving a mess. Their “no littering” signs had done no good so they closed the road.
That was my first experience with our government taking the lazy way out to solve problems. I was being punished for the wrong doings of others. I’ve seen this all of my life. Now that I’ve reached retirement, it continues. I guess I should expect nothing different.
I am a moderately conservative Republican, but a sales tax to replace our income tax is a terrible idea for older citizens. I pay a known amount for state and federal income tax. I then have the rest of my income to enjoy. This is the result of result of a life time of planning. I have income from my investments and a small pension and use them to make my life enjoyable. I worked for it. I earned it.
So, we have some people who arent’t paying taxes under the current plan. The answer is to do the work needed to make sure these people are on the tax roles or remove them as a burden. Instead, our legislature passes a do little immigration bill and proposes a consumption tax to make sure the state get’s it due from illegals. This is a direct punishment to many senior Georgians and I for one resent it.
Illegals, by definition, are breaking the law. Maybe it’s a federal issue, but it’s a state problem in Georgia and if the federals won’t fix it, the people we hire to make our laws should. I’m smart enough to know that rounding up all of the illegals and jailing or exporting them won’t work, but stiff penalities for hiring them would. If illegals can’t make money, they won’t owe taxes and can’t afford to stick around and be a burden. Worry about your constituents instead of big business.
Taxing people who are here illegally dosen’t make them legal, but it does legitimize them to a degree. This is just wrong. Fix the problem!
This is very much like the proposal which was pulled because it’s an election year which would shift the burden of funding education from property taxes to sales taxes. The idea is that some people have children in school, but aren’t helping pay for it. Guess what, there are a lot of people in Georgia who are using services for which they aren’t paying. My county eliminates the education portion of my property tax and I don’t want it added back as a sales tax.
So, we’ve got proposals for a 23% (actually 30%) federal tax, an increase of 6% in our state sales tax (so we don’t have to deal with the real problem of illegals) and a 4% increase in our sales tax to pay for education (because some people are escaping the property tax). Wow, I have to tell you, my taxes will go up – way up. The bright retirement I worked so hard to achieve is beginning to look a bit dim. Just like 45 years ago, it’s easier to put up a gate than do something about the illegal littering.
As I stated, I’m a moderately conservative Republican and for the first time in my life, I have no one on a local, state or federal level for whom I wish to vote. I am ashamed of the Republican party. It seems to me that politicians of all ilks have become more concerned with keeping their jobs than doing what we hired them to do.
Thanks for joining us Senator. Sorry for the rant, but after asking our legislature to fix our immigration problem, we get a watered down bill and a proposal to penalize me so that we can tax people who should have been addressed by a real solution to the problem.
Danny,
If it isn’t “doled” why not just reduce the percentage a point or two and forget sending out the checks. Sending out the checks is a thinly veiled version of socialism.
The monthly “stipend
lhuff,
I do believe that. I would prefer to see it eliminated altogether and have the taxes lowered instead, but you won’t see that happen because special interests would wail and scream about how this is an unfair burden on our state’s poorest people. The monthly check compromises so that that argument is (somewhat)nullified.
As for your other comments, you have obviously not read the Fair Tax book. The 23% consumption tax would take the place of our current income tax and the taxes levied on businesses. As a result, the taxes imbedded into the goods and services you currently purchase (a large part of each business’s overhead) would no longer be a part of the price. Thus, the prices of goods and services would go down and be replaced by the new consumption tax. Same goes for state taxes. As a result, your cost of living would not go up and the Social Security check you recieve each month would increase by nearly 30%.
I keep seeing this word “failed”. I don’t think it means what you think it means, so someone explain to me what this other meaning is.
See, to me “failed” means that the government doesn’t collect enough to pay for the services it provides. It may be due to poor budgeting, or it may be to inefficiencies in methodology and/or collection. But last time I looked, Georgia collected a small surplus this year. So “failed” seems to be the wrong word.
So I need to ask – just why are folk calling the current system “failed”?
Demonbeck,
Here’s my basic problem with the FairTax. It doesn’t appear to be levelling with its readers.
The implication of the book is that everyone gets to pay less tax. But realistically, if you’re reducing someone’s burden you’re increasing that of someone else.
Who pays more and how much more do they pay? Ideally I’d like to see that on a per capita measure, but I’ll take knowing the demographic slice and the amount and I probably can figure that for myself.
Secondarily, who pays less and how much less do they pay? I’d use that as a reality check – the increase to one group should match the decrease to the other.
And yes I’ve read the book, which is why I’m asking the question. Because again the book – when it gets to such details – feels like someone’s trying to sell me “something for nothing”.
I have not read the book, but joined the fairtax.org movement when it first started. I removed my support because of the checks. We are compromising away the ideals upon which this country was founded and I refuse to support any effort to promlogate this.
I think you are somewhat optomistic and perhaps a bit idealistic. We are currently living under a reduction in tax (which the Republican congress we worked so hard to elect refuses to make permanent) and I haven’t seen any reduction in the cost of any items I buy. I understand it’s not 23%, but regardless, it has helped the economy and reduced my tax burden a few cents, but it hasn’t reduced prices.
Thanks for your reply. We certainly need to do something, but I don’t believe the Fair Tax as it is described on fairtax.org will do the job. I’ll buy the book and read it. Maybe I’ll change my mind.
kspencer,
Obviously, you didn’t read the book closely enough. It goes into great detail about the underground economy which pays no taxes whatsoever into our current system. Folks like drug dealers, prostitutes and other criminals, illegal aliens and Willie Nelson (j/k – tax evaders). Their inclusion would add billions of dollars to the fold.
Folks who hide their money in offshore accounts would become subject to these taxes when they buy things with their money in the States. In fact, imagine the influx of money that is currently outside of America into our nation’s banks!
Imagine the amount of tourists who visit our country and the money they spend coming here. All of that would be subject to the consumption tax as well.
lhuff,
If your only problem is the monthly tax rebate check each family would receive under this system – then I really am perplexed by why you would oppose it. Certainly, you have more than one problem with our current complex tax system.
I have several problems with the current tax system. I don’t like it’s progressive structure. I despise the “earned income” provision. I loathe the complexity. I don’t like the fact that it misses the underground economy altogether. It needs fixing and it needs fixing badly.
My point is simple. You guys have been trying to change it for several years and barely got noticed. If you do get it changed, it will take even more years to change it again. It is extremely important that it be fixed correctly this time. I don’t want it to go from worse to bad. I believe that’s what will happen with the fair tax as I understand it from the web site. Like I said, I’ll read the book and may change my mind, but beginning a fix with a compromise keeps getting us into trouble with other issues (such as the immigration problem we’re addressing here). I don’t understand why it’s a good idea with our tax system.
BTW, my only problem with the check isn’t the progressive bend it adds to the fair tax. Someone has to maintain a list of people who should receive a check. Someone has to fold, spindle and mutilate the check. Someone has to take it to the post office to mail it. Sounds like we might need a bureau for that. I wonder what it’ll cost. I wonder what will happen when they decide people who make over $30K a year don’t get a check… or maybe a smaller check than someone who makes $15K but a larger check than someone who makes $60K. Hmmm, sounds familiar.
I’ll read the book while you read the history of our current tax system and the I.R.S. Deal?? It wasn’t supposed to be this way.
You’re a good advocate for Fair Tax. It’s nice to see passion about an important issue. I just think it needs more thought and more work.
The check comes to you based upon the size of your family, not based upon how much you make. The authors have even stated that perhaps an ATM type card would be more appropriate and easier to maintain than sending a gazillion checks each month.
Personally, I would prefer to get my rebate annually, but let’s not pick nits here. The idea is sound and I think good. It is the only one that helps to solve the issue of non-payment of taxes on a grand scale while simplifying our tax code.
Frankly, I am for anything that simplifies our tax code and would willingly go from “worse to bad,” at least it would be a step in the right direction.
You definitely need to read the book. (New paperback version comes out soon!) Based upon your comments, I believe that you too will become a believer.
$8.97 for the Fair Tax paperback at Amazon.
Yeah, I realized the check was based on the size of your family. No matter the delivery method, monthly check, annual check, ATM card, it still requires a group of people inefficiently using tax dollars to administer.
It still rewards, as Neal Boortz would call them, “brood mares”. It is still progressive (although I wouldn’t feel that way if we could do away with that darned check). The rebate just adds up to a bunch of negatives and even worse the potential for more negatives and abuses.
Danny,
I pre-ordered tha paperback for a May 2nd shipment. I will read it as soon as it arrives.
Thanks for the good debate. I wish I had read the book prior to seeing this discussion. I felt a little unarmed. Good luck!!
Actually, Demonbeck, I’ve read the book. Got it about ten feet from me as I write, but I’ll reread it. Again.
See, the first time I read it I was nodding in general agreement – till I read the appendix that showed the actual calculation of tax rate. And the reveal of that sleight of hand had me go back through it with a fine tooth comb and soundly question if not reject the things I’d slid past before.
The sleight of hand? Throughout the common number cited is 23%. Only at the end do you discover he’s using mathematical semantics – most readers would call the number 30%. On the second passthrough the second glaring sleight of hand arose – the claim it would eliminate the need for the IRS. Quite simply, bull. The nature of the system is such that MORE investigators will be required.
There will also be a need for a network of rules almost as complex as those presently existing. No? If a church member purchases bond and donates them to a church, who pays the sales tax? (Oh, I know the answer. Stocks and bonds aren’t taxed as they’re not ‘really’ sales. And I’ll be returning to that point shortly).
I do recall the description of the hidden economy that allegedly doesn’t pay “its fair share”, but the problem is that when I started working through the numbers two facts arose. First, there were an extraordinary number of duplications – people who fit more than one category. Second, a very large proportion of those ‘not paying taxes’ would be living almost entirely on the prebate – in other words, still “not paying taxes.” Since the lower class is still paying a lower proportion, they’re ok. And the taxes of the upper levels of income decline. They don’t? Bull. What proportion of the income of anyone earning under $100,000 (over double the median) goes to taxable goods in a year? Answer, 70% or better. What proportion of the income of anyone earning over $500,000 goes to taxable goods in a year? Answer, less than 40%. Recall that investments are tax-free. (Yes, investments, those non-taxed stocks and bonds.) The rich, then, pay less than they did. So if the rich pay less and the poor pay about the same, it means the middle class pays more. Even though the book says otherwise.
And it completely ignores the fact that a new underground economy would emerge — If I mow your grass for the summer and in exchange you fix my car, how much does the government collect? How does it know? Oh, I have to fill out a tax form? If I don’t, how do you know I SHOULD have done so? Oops, even more enforcement officers.
Bottom line, the FAIRTax isn’t simpler, it doesn’t reduce the size of the IRS or the tax code. It won’t stop a non-taxed underground economy from operating. It does reduce the taxes the rich pay, but it’s not the poor that pick up the slack – it’s me. I decline the offer.
By the way – most public libraries in this state have a copy or two available to check out. Courtesy of your government and a surprisingly tiny proportion of your taxes.
Kirk
Technically speaking kspencer, per my accountant, if I paint your house and you rebuild the engine in my car, we’re already supposed to count that as taxable income. I know, I know, it sounds ridiculous. He told me this some time ago, probably 7 or 8 years ago.
Danny, yes, I know. You are supposed to fill out a 1099-B using the fair market value of the service(s) or good(s) you provide, giving one copy to the IRS and the other to the person to whom you gave the service or goods.
The thing is, the FairTax would make reporting of this more important and at the same time would make detecting and investigating it more difficult. To be fair (pun not intended), barter of used goods would have no impact – FairTax is supposed to apply only to “new” goods. However, services are always new goods. Thus the barter example is one of the more blatant examples of why the allegation that the FairTax would eliminate the need for the IRS is absolutely wrong.
Kirk
This is a good first step to prepare our state for the passage of the FairTax. Florida and Texas each do not have a state income tax. When the FairTax is passed each of those states have said they would be capable of lowering the state sales tax to 2%.
So when will the FairTax posse grow a brain? Asks the National Inquisition.
Nothing is more un-American that this FairTax and its mindless propaganda.
Just say no to taxation without representation.
Who wants to go down in history as the first elected American to tax people who can’t vote? Must be a Republican!
Under the Fair Tax, people without voting rights will be directly taxed.
MD, does that include felons, those here on work or student visas, illegal aliens, etc.? I think these folks are taxed without representation already.
Maybe I should rephrase:
-taxed “without having voting rights.”
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