Erick mentioned Speaker Richardson’s desire to overhaul the State’s tax code. I have two items to add to that discussion:
1) According to the Political Insider, Arthur Laffer will advise State Government on tax matters:
“What we’re doing is hiring Dr. Laffer to analyze every single governmental system in the state, every county, every school board, every city and say, ‘here’s how much money you generate right now, here’s how much money will be generated if you do this, and it will be more than you get right now.’ And we’ll have to guarantee that,” Richardson said.
Dr. Laffer is most famous for the “Laffer Curve” which describes the relationship between tax rates and tax revenue. You can read about it here.
2) The Georgia Public Policy Foundation is one of many groups calling for a complete overhaul of Georgia’s tax code:
Georgia has the 25th-highest tax burden in the country, according to the Tax Foundation. Lowering this state’s tax burden means reducing the growth of government. Transparency is one of the best protections against needless government expansion.
A state and local spending limit would make increased spending very transparent. A spending limit prevents government from growing faster than a predetermined benchmark, unless overruled by a supermajority vote or a referendum. At the state level, the Governor could enforce a spending limit immediately by using his power to set the annual revenue estimate. At the local level, this would spell the end of “stealth” tax increases. All existing arbitrary restrictions on local revenues could be eliminated and local governments would gain the flexibility to design a tax system that best fits their needs.
Georgia should also implement a state version of the recently passed Federal Funding Accountability and Transparency Act introduced by Senators Tom Coburn and Barack Obama. President Bush quipped that this law will allow citizens “to Google their tax dollars.” Georgia could establish a searchable database of all recipients of state funding, providing added transparency to help citizens determine the difference between “pork” and justifiable grants and contracts. This fits perfectly with General Assembly’s recently passed requirement for every public school to publish its budget each year.
Principled tax reform, limited spending and transparency in government are all worthy goals for the upcoming session of the Georgia General Assembly. Republican leaders in Congress lost their majority because they failed to live up to their conservative fiscal principles. Let’s hope Georgia’s elected officials don’t forget theirs.