Interviewing Laffer

Travis Fain writes up a Q&A with Art Laffer about the Speaker’s tax plan. It’s worth a complete read.

Georgia’s current tax system isn’t bad, Laffer said. But it can be better, which is why he’s behind Speaker of the House Glenn Richardson’s plan to repeal property taxes across the state and replace that revenue by expanding the existing sales tax to cover services as well as goods.

Then the state would divvy that money up among local city councils, county commissions and school boards, which would keep running local operations.

Though property tax rollbacks have happened in other states, including a big one in 1978 in California that Laffer was part of, Georgia would be the first state to repeal them completely – if the General Assembly, the governor and voters across the state approve.

I’m putting odds on passage right now at about 25%, but my wife thinks the odds of passage are over 50%. She’s 100% on board, mostly as a result of just living in Bibb County.

But, I think, sitting for three hours in her hair stylist’s chair listening to the (barbers)(hair dressers)(hair stylists) bitch about having to withhold sales taxes, is going to start weighing on the soccer moms of Georgia, who in turn are going to start having issues.

23 comments

  1. eburke says:

    Laffer says that eliminating the Income Tax would have the same positive effects of the Great Plan. The difference being that it doesn’t centralize the revenue of the whole State in the hands of the House of Representatives and it doesn’t reduce local control of funding levels. Let’s eliminate the Income Tax and give everyone an immediate 6% pay raise.

  2. You meant to say, let’s eliminate the income tax and prevent employers from getting 6% of their next salary increases. You think if the state gives everyone a “raise” that employers aren’t going to factor that in to their salaries?

    I wish Republicans would be more honest about this stuff though. If a tax plan is revenue neutral, which all Republican proposals claim to be, that means the money will be made up somewhere. Since Republicans are in favor of the plan, that probably means that the wealthy would pay less in the future than they pay now. Which means the non-wealthy would pay more. So, “everyone” will not be getting a raise.

  3. housecreek says:

    Taxes is always a top five issue when asking the population there 10 most important issues. We have a tax plan on the table that will fundamentally change the way taxes are done in Georgia, and all you can here from pundits is… This is crazy and so is the Speaker.

    My friends, you are about to see just how smart pundits really are. When the tax plan is finalized and the real push begins, you will see that the people of Georgia are starving for a change.

    My property taxes went up over $1000 this year alone. People are tired of not being able to budget it. You can budget a sales tax or income tax, but you can’t budget property tax. You never know when it is going to go up.

    The right to own property is a God-given constitutional right. The right for the government to take it away is one given to them by the government.

    We do not ever own our home or land completely. We rent it from the government. Don’t believe me? Don’t pay your property tax and see what happens.

  4. housecreek says:

    Income and consumption is not a Constitutional right. Property is. If the government can take my land if I don’t pay them rent (tax) is that constitutional?

  5. Painterman says:

    No income tax and yet if you don’t pay your property tax bill each year the government can take your home from you. I would like to see both go away, but by golly when the mortgage gets paid off you shouldn’t have to worry about being assessed out of your home!

  6. housecreek says:

    Amen Painterman! Amen! There is no real check on local governments. Taxes driven by the locals has grown at a far greater rate than incomes. It’s time to do something about it.

  7. housecreek says:

    The problem is, Chris, that everyone goes into local office saying no tax increases. They raise taxes, are voted out. Yet the taxes stay the same. Another problem comes along, tax increase. The cycle continues.

    This is about fundamentally changing the way we tax people. It accounts for a service base society, not agrarian. I truly believe that Georgia will see so much growth if the tax plan goes into effect, that all rates will be dropped because the base will be bigger.

  8. Randy Lewis says:

    I believe that property taxes are a problem, but everyone is talking about them as if they exist in a vacuum. Spiraling school taxes, which make up about 70 to 80 percent of all property tax bills, causes the

  9. housecreek says:

    Getting rid of property taxes would. Schools would have to tighten their belts pretty tight if they were left with the choice of going to the General Assembly and the Governor to ask for a tax increase to fund schools.

  10. Hey housecreek, enough with Glenn’s bogus “agrarian” based tax system.

    Property taxes were “agrarian” about 200 years ago when land was taxed based on acreage and not value. Around 100 years ago, when the country moved from being agrarian to industrial, the property tax system was reformed.

    And guess who led the revolt? Farmers! Farmers in upstate New York and other places like that were tired of paying the same for their acre that the owner of a pricey Manhattan lot paid for his. So the system changed to being based on property value. That is why in Georgia you have one price for your base land and another for your improvements.

    The income tax and the modern property tax are about as old as each other. Why don’t you call the income tax an agrarian based tax system as well?

    Property, unlike incomes, purchases etc doesn’t move. There today, there tomorrow (and in some cases replaced by something better tomorrow). That’s why it makes sense to tax, it’s easy to budget for. Unfortunately, assessments are based on market prices, and market prices got out of whack. I fully expect assessments to stop growing at such high rates because the overall market which assessments derive their value from is cooling off.

    Now, why would we want to swap tax rates at the top of a bubble and lock ourselves into permanent higher taxes (+inflation) instead of riding out the speculative wave and letting values and assessments get back in line with where they should historically be?

  11. housecreek says:

    Hey Chris, Enough!!! Because the way we tax is wrong! We tax improvements, success and the American dream.

    Why can’t we tax income and consumption. That way, you can will have property ownership outright, and every time you put up a fence, build a pond, build a deck or landscape your yard to look better, you won’t have to pay the ridiculous tax that is assessed by someone looking at your property and say….. hmmm, looks like this place is more expensive!!!

    Who in the hell ever said that just because you work hard and earn more than others, the government should take more from you? That’s right, the Democrats and a few soft minded Republicans.

    Why shouldn’t the tax be spread out among the masses. No matter what you make, you pay the same as everyone else? It makes sense. Too much sense!

    No, instead, most Democrats don’t want to talk about fairness because it gets in the way of their, “what are you going to do for me” politics.

    Farmers, by the way, are not the cause of concern here my friend. The cause of concern are people that own a home in the suburban and urban areas that get assessed completely out of their homes because their taxes keep going up.

    And like I said earlier, once the taxes go up, they rarely, if ever, come down.

  12. Oh give me a break House. It’s proportionally harder for a poor person to pay for the sales tax on the same food that they need to live as a middle class or wealthy person.

    As far as fairness, what’s so different about choosing to buy really expensive stuff and paying a higher amount of sales taxes and choosing to live in a nicer house and paying more than someone who either chooses to live in a cheaper house or isn’t able to afford that choice in the first place.

    The price of milk has gone up a lot in the last year. With milk assessments going higher and higher and rarely, if ever, coming down, I will be priced out of my diet. Blah blah.

    As you can see, we can go back and forth on fairness all day. I place a value on a constant government that is able to plan for the future to provide the services it is appropriate to provide. There is really no better way to have a reliable income source than the property tax. If you think assessments are unfair that’s one thing, if you’re upset that you live in a house that costs more than when you bought it that’s another.

  13. Oh and may I add that you can’t live in Georgia/Georgia County/Georgia City and pay your property taxes elsewhere, unlike your purchasing decisions. If you come to live in County/City X because of the schools/way of life/lower services/higher services, don’t you think you should pay for them?

  14. housecreek says:

    Chris, it is about principal my friend. If I buy a shirt and pay the taxes on it, there is nothing that can be done by the government to take it away.

    If I buy a house and pay for it, I rent the land from the government for the rest of my life.

    If the government keep asking for more and more money, I will have to work till August to pay them and keep what is left for me and my family.

    And that my friend is called socialism.

  15. Government’s most important function, if you ask me, is the maintenance of our capitalistic system. Your shirt is not capital, your land is. Doesn’t it make sense that those who own the land that benefit from the system pay for said system?

  16. Harry says:

    The only real way to achieve a reduction in property tax and income tax is to get the deadwood off the state payroll.

    One example: Why does DOT need a district staff in the field offices, mirrored by an additional district staff in Atlanta with similar but different job titles? Is this how they achieve “diversity” in state government? Just asking.

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