Tax Changes Coming

Travis Fain has the details.

“If we’re going to tackle something as big as tax reform, we’d have to do it sooner rather than later,” Georgia Speaker of the House Glenn Richardson, R-Hiram said last week. “But not as soon as the next 45 days.”

I have to say that, while I am a fan of tax reform, I think the Speaker is doings things extremely competently in this area. His go slow approach, rejecting a piecemeal approach, is the best way to handle something this complicated.

As we’ve seen at the federal level, a piecemeal approach will, over time, just expand the code and make it more complicated.

7 comments

  1. commonsense says:

    A prediction- Before 2010 rich people will pay less in taxes (through a “shift” in the way the state collects taxes, to be more “fair”) and the poor are going to have to start paying taxes on food again.

    We can’t pay for PeachCare, we can’t pay for retirement healthcare, we aren’t fully funding schools. This is a sad example of ideology trumping reality.

    Mr. Speaker why don’t we TOBAR the state, kill spending on everything but roads, and call it a day?

    We’re 25th in tax burden among the states…dead center. Does that really represent a huge problem?
    http://www.taxfoundation.org/publications/show/2184.html

  2. IndyInjun says:

    Commonsense,

    You are absolutely correct.

    One fly in the ointment of the movement toward a sales tax is the extent to which the locals have moved toward sales taxes as a method of funding. Increasing the state take threatens to eat into the tax collections of the locals and is rightfully seen to cannabalize local funding.

    An even greater complication is that the funding streams from the local sales taxes have been leveraged to provide up front money for projects. The counties issue bonds to cover spending today and use the sales tax streams to make the bond payments.

    Under the state INCOME tax system, that is to be DONE AWAY WITH, the interest on said bonds is exempt, allowing the state and locals to finance at lower rates.

    The tax ‘reformers’ have to be very careful of passing the ‘law of unintended consequences.’

  3. jsm says:

    As I understand things, many really “rich” people currently pay less taxes than most working folks because the tax on capital gains is only 15%. The more of their income that they can gain from dividends, the better. I wish I could find some statistics showing the numbers of people making above $1M/year on dividends vs. those making that via a salary check.

    I believe tax reform needs to address this issue and be sure that the wealthy do not work the system to pay less taxes than the rest of us while liberals in government try to raise revenue by increasing income taxes on the working class.

    Tax reform is necessary. Everyone should pay taxes–even the poor. The wealthy should not be allowed to use loopholes to avoid paying their fair share. These issues need to be dealt with, and I hope the Speaker will work toward this end in Georgia. If done right, the Feds could learn something from it.

  4. IndyInjun says:

    There was an article in the last week pointing out the trend, as evidenced in Ohio and Texas, toward gross receipts taxes.

    Generally, such taxes are broadly imposed on total revenues without any deductions, exclusions, or credits.

    True tax reform must tax EVERYONE, business included, on a very broad base and at low rates. Thr PROBLEM is that spending is so high at every level of government that even broad based tax systems cannot hold the rates down to an acceptable level.

    Until spending is addressed, tax reform will be illusory.

  5. commonsense says:

    In Georgia capital gains are taxed just like regular income (unless you’re the Gov and can get the law changed on your out-of-state 1031). So here the code is already more equtable than the Federal law.

    Everyone does pay taxes jsm. Everyone who lives in America pays sales tax. Everyone who works legally pays social security taxes. Those who earn above a varying threshold pay income taxes. Belive me I could go on and on here.

    Ultimately though taxes are like a ballon, the state needs X amount of air to fill it and it’s going to get it from somewhere. When tax laws are changed that ballon is squeezed and some people end up paying less while others end up paying more. You can couch it in the language of equity or fairness but it doesn’t change this basic fact

    (yes I know Laffer curve, blah, blah, blah, but real economist look at that differently than ideologs)

  6. IndyInjun says:

    From the Travis Fain article…..

    “O’Neal, who also is chairman of the House Committee on Ways and Means…said a moratorium on new sales tax exemptions, of which there are already more than 100 in state law, could be a possibility while more substantial reform is studied.”

    Compared to THIS in another Fain piece..

    “Perdue has proposed legislation that would exempt Range and other companies from paying sales tax on construction materials used to build biofuel productions facilities.”

    Exemption of construction materials is a major expansion of existing exemptions.

    It would seem that the governor and the tax committee are on different pages, no?

  7. Bill Simon says:

    Commonsense,

    Please define for us ignorant folks exactly WHAT level of net worth and/or annual gross income someone earns YOU would consider “rich”?

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