His Name is Earl

To paraphrase, commenter cheapseats asked Earl Ehrhart if he should be planning on buying his next boat in Alabama or another neighboring state if/when the GREAT plan passes, because Georgia sales taxes will go up 4%. Here’s Earl Ehrhart’s response:

Since we are not advocating any change in the state portion of the sales tax, then your tax will be the same in that year if this plan is successful.

Ok, Earl. Are you trying to be hyper-technical here or are you just flat out lying? If property taxes are eliminated in you and Glenn’s plan, sales taxes will be raised to make up the difference. But now you say you aren’t advocating any change in the state portion of the sales tax…but yesterday you said the language that you are polling mentions a 1% increase in the sales tax.

So what is it?

28 comments

  1. cheapseats says:

    well, well, well…as much as I would love to get into a discussion about boats, I am really hoping that this one example doesn’t generate comments specific to boats because my real question was in regard to the impact of a higher sales tax, compared to our neighboring states, on our Georgia businesses.

    There is a very large percentage of the geo-political area known as Georgia that is within less than an hours drive from another state and, whether it’s a boat or a new HD TV, or a tractor, or anything else you can name where a 5% savings is greater than the cost of the gas to drive over there…well, you get the idea.

    Then, there’s that whole online shopping thing…already grabbing an ever-increasing share of retail sales and, once we increase sales tax, it’s going to make the online retailers just totally out-of-the-ballpark better deals than local shopping.

    I’m just saying – let’s not talk about boats; let’s talk about business.

  2. Decaturguy says:

    The lies and distortions from the proponents of Glenn Richardson’s tax raising, big government, local control elimination plan just keep mounting and mounting.

  3. griftdrift says:

    And this brings up another great point. I’ve stated in the past that I am philosophically opposed to this plan but for more practical matters, we simply don’t know enough about this thing yet.

    In order for it to be revenue neutral, I’ve heard the sales tax would have to be raised anywhere from 1% to a whopping 6%.

    I’ve also said I’m for tax reform but this ain’t it. And even if it is it, can we at least be sure what is is first?

  4. Icarus says:

    To paraphrase Cheapseats,

    Should Stan Thomas be scouting land on the other side of the Talmadge Bridge, in North Augusta, or Phoenix City, to build more of his Home Depot/Kohls/Target/et al power centers?

  5. Icarus says:

    I don’t think Rep Ehrhart is lying to us. I think he believes in some very bad information he has been given. I think we all might need to go back, and let’s look at the assumptions that this plan is being based on. As such, I have two basic questions:

    1) What is the total amount of property taxes collected in the state annually (or at least for the last year)?

    2) What are the products and/or services that the exemption will be removed from, and what was their total combined revenues for the last year?

  6. griftdrift says:

    Apocraphyl lottery story.

    Way back in the stone age when griftdrift still wore a painters cap and hair metal ruled the land, our neighbors to the south passed a Lottery. At some point, the Florida lottery commission released the top ten ticket sellers statewide. One surprise in the top ten was a Jax liquor store. Not that doesn’t seem odd at first until you look a little deeper and discover this particular Jax liquor store was on a particular stretch of US-319 with no other business for miles around. It just happened to be the closest lottery outlet just over the state line from Thomasville, Albany, Moultrie, etc.

    I know one group that would definitely support the plan. Let me see if I have the Tallahassee Chamber of Commerce in my rolodex.

  7. Rpolitic says:

    I think ACCG deserves some credit for wanting to have a dialogue over the issue as opposed to GMA and their blast first approach. Everyone I have spoken to about this, both for and against, believe the discussion is good and that something needs to be done. No one really knows what that is as of yet so I think some credit has to be given for at least starting the conversation.

    What is unfortunate is the continued venom. We all know who agrees and who disagrees with the idea so lets talk about the facts that we do know. I for one can’t wait to see GMA this session they either are going to grovel and eat crow or they have to continue on the attack. Either way it should be fun to watch.

  8. cheapseats says:

    “Now you have a friend in the diamond business – visit our new location in Columbia, South Carolina.”
    😉

  9. eehrhart says:

    Icarus,

    The property tax collected is approximately 8 billion, while the cumulative exemptions are approximately 8 billion. The numbers are directly from the Department of Revenue. If you would like I will email you the exact figures.

    Cheapseats,

    There seems to be a developing meme from opponents that we are proposing rasing the state sales tax rate. This is just flat wrong and will not happen. Again just more rhetoric designed to cloud the issue.
    I will point out that when you buy your boat and domicile it in Georgia if the plan is successful, you will not pay any property tax on it either. Something neighboring states do not offer.

    Happy boating in Georgia without the birthday card from the state asking you to pay for your boat again and again even after you have fully paid the dealer.

  10. cheapseats says:

    OK, I’m listening. Thank you for responding.

    So, the report I read that had Richardson promising to exempt doctors from the sales tax is not true?

    Seriously, and respectfully, I know quite a bit about how the General Assembly works (though I will not reveal just how I know this) and I think the big fight is going to be over who and what is going to get exempted from sales tax.

    I think the ONLY way to make this work is to have no exemptions/no exceptions/no excuses/no crybabies anywhere in the proposal. I’m not saying I like it but I am saying that as soon as anybody starts trying to exempt any group, the barn door is open and all the livestock is long gone. The lobbyists will have a fit worthy of a nationally televised, pay-per-view event! Maybe we could sell tickets to that and raise enough money to support public education. Hehehe…

  11. Icarus says:

    I’d love to take a look.

    Icarus dot GA
    at
    gmail dot com

    (that supposedly keeps the spam crawlers away)

  12. eehrhart says:

    Cheapseats,
    No need to thank me I enjoy debate and discussion just not name calling.

    I agree completely about the run on the bank which would occur if we start in allowing exceptions to exemptions. This happened exactly that way in Florida. I have been a johnny one note internally on exactly this issue.

    The only exception I am aware of discussed is the food and medicine exmeption which is current. The current discussion is that the point of sale sales tax exemption will disapear and that taxpayers will receive this refund on their state tax return. I particularly like this concept as it means those who file and pay income tax will benefit. Those who do not file, transients coming through the state buying food, illegals who do not file; will be picking up the tab for taxpaying Georgia citizens.

    With respect to your business question; Consider this: A mom and pop small retailer on the Georgia line who daily competes with on line sellers and across state line retailers. Under the plan they would no longer pay inventory tax, no longer pay tax on their lets say two delivery vehicles, no property tax on the paid for building and land which has been in their family for lets say 3 generations, but they still get a bill from the local government for it. I would submit that these costs are signifigant for that mom and pop and removing them will give them competitive advantage over the out of state and online competition. I know just one example, but relevant.

    Icarus,

    I will email you the info when I get to my capitol office tomorrow

  13. NonPartisanGA says:

    From Don Rooks:

    Media reports about the controversial initiative to eliminate all property taxes keep coming — almost daily. Speaker of the House Glenn Richardson is the driving force behind this initiative, which originated on the next-to-last day of the 2007 General Assembly session when it was introduced as HR 900. GSBA analyzed the constitutional resolution as originally introduced, but public pronouncements by the Speaker and others indicate that it has undergone some significant changes.
    So what does the attempt to eliminate property taxes [apparently] look like now?
    For one, the initiative has a different name — the GREAT plan. The GREAT stands for — Get Rid of Every Ad Valorem Tax (the only source of local revenue available to most school boards). To compensate for this loss of revenue, would be a broader application of the sales tax, including taxation on virtually all services [electrical, plumbing, legal, hair cuts?] not now taxed.
    But property taxes on the following would be eliminated: Land, houses, commercial, inventory, autos, trucks, boats, and planes.
    However, the plan would eliminate most of the many, many current exemptions from the sales tax. For example, food — now exempt — would be taxed; but those up to a certain income level [$30,000?] who file Georgia income tax returns would receive a refundable credit.
    Could bond initiatives still be passed by local school districts? Apparently so — but only if approved by two-thirds of the General Assembly and then two-thirds of voters, as opposed to the simple majority required now.
    Distribution poses another issue not yet clarified. The state would receive all the taxes on sales and services. What happens then? The General Assembly would apparently decide which entity (cities, counties, school boards) gets how much back.
    Distribution back to school systems poses a particularly thorny situation, given comments that school boards would still retain considerable budget decision making authority. It has not yet been publicly mentioned if the distribution would be a flat-rate per student, come back as now through the QBE formula, or be given in something like a block grant.

  14. Earl, $8 billion is 4% of $200 billion. You are telling me that there are $200 billion of services that are untaxed in an economy of approx $387 billion annual size?

    Put it another way, the average Georgian is purchasing approximately $22,000 of untaxed services per year? That’s a lot of haircuts.

  15. jm says:

    Is there any other state that currently works under this model?
    I am not a fan of any plan that puts more local money at the state level. I’m OK with getting rid of state property tax on my truck ($150/year) and then adding sales tax on stuff, and then giving me a deduction so that I essentially pay the same $150, but spread over the year. But I want my house tax to go to my local cops and teachers to provide me the services in my neighborhood. I get my trash picked up twice a week, plus recycling once a week – DeKalb does that; I don’t want the state saying thats not OK.

    I am not a fan of any plan that says we will pay significantly more to get less, nor am in favor of a plan that says we will pay significantly less, and won’t be able to afford more.

    So again, simple question. Is anybody else doing this, or are we the guinea pigs?

  16. IndyInjun says:

    I can forsee the future. It is a bright one for the Georgia Department of Revenue. For the rest of us………

    By year number three, tax revenues will be falling, the state will be in crisis, and the Department of Revenue will begin its ‘ascent’ to the same hated status of the IRS using powers that some in Atlanta would just as soon we don’t know about.

    With the state largely dependent, and the locals totally dependent, upon sales taxes the Department will be auditing INDIVIDUALS to capture the use tax (an equal, reciprocal tax to the sales tax) on internet purchases, services, and other transactions audit able from the purchaser’s side of the transaction.

    The public is unaware that DOR has this power RIGHT NOW, but has not the incentive to use it in the fashion of the hated IRS audit. This changes with the GREAT plan.

    Rep. Ehrhart and the Speaker should be asked about this up front.

    Specifically, Anderson v. Blackmon, 123 Ga. App. 128, 179 S.E. 2d 657, CCH-STATE-CASE-APP-CT, (Court of Appeals of Georgia, Division No. 3., Dec. 3, 1970), which authorized the Revenue commissioner to estimate sales tax liability when taxpayers records were insufficient, would need to be negated so that INDIVIDUAL taxpayers can rest assured that there will be no IRS-style audits.

    Also, Code of Georgia, section 48-8-52 requires taxpayers to keep suitable records of sales and purchases. In order to assure INDIVIDUAL taxpayers that intrusive audits of their PURCHASES will not be happening under the GREAT plan, this section of the code must be revised to put record-keeping requirements and tax collection requirements on SELLERS, NOT PURCHASERS.

    Without these changes it is my contention that 3 to 5 years out we citizens will be in as great a fear or the GADOR as the IRS. Most do not keep records and will be helpless against a state short on funds armed with requirements that we have kept records when we haven’t and auditors charged with generating revenue despite the unfairness of targeting the unsuspecting public.

  17. suwtiger says:

    I just wish the lawmakers would be honest and tell the truth. The folks that paid for the study through the PAC are the Timber companies, Land Bankers, Commercial/Industrial property owners that stand to win big….no not really big, how about HUGE. Mall owners, Office Tower owners and Timber companies that own thousands of acres will no longer pay the Billions with a “B” in property taxes and support the local governments where their holdings are located. As a Republican it really troubles me that members of my party are pushing a plan that DOES take the tax and spend decsions from the locals and send it to the Gold Dome. I hear it now, “the locals can pass another 1 cent local option tax anytime they want” coming from the GREAT camp. However, they dont tell you the additional 1 cent is now on services, food etc….that the local option taxes in place today does not cover. One of my close friends is a member of our school board and I believe when he tells me that the school boards around the state know they will probably never be able to get a local option tax passed again once the citizens realize how many more things that tax will apply.

  18. midgajim says:

    I’ve just got to respond to Mr. Ehrhart:

    “With respect to your business question; Consider this: A mom and pop small retailer on the Georgia line who daily competes with on line sellers and across state line retailers. Under the plan they would no longer pay inventory tax, no longer pay tax on their lets say two delivery vehicles, no property tax on the paid for building and land which has been in their family for lets say 3 generations, but they still get a bill from the local government for it. I would submit that these costs are signifigant for that mom and pop and removing them will give them competitive advantage over the out of state and online competition. I know just one example, but relevant.”

    If you truly think that, then you have really drank the kool-aid on this issue and there’s no point in discussing it. Ask any single business owner in your district if they think this scheme is going to help them get MORE customers–esp. in a border county.

  19. eehrhart says:

    I have talked with many business owners thank you for asking and they all agree. We actually had coffee not Kool Aid.

    They agree as do most of the taxpayers in Georgia.

    Why not give the taxpayers a chance to make their view known. If it is such a bad idea then of course they will vote against it.

    Icarus:

    If you pick up this thread my fax is down so it will be next Monday before I can get you the information we discussed

  20. eehrhart says:

    The property tax must be voted upon by the people because it is in the constitution and it is required by law that a referendum be held to change the constitution.

  21. Icarus says:

    Rep Ehrhart,

    It’s all good. I’m in the beautiful N GA mountains for the weekend. Will look at it when you can get it. Have a good weekend yourself.

    Icarus

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