Those of us from Georgia who attended The Americans for Prosperity’s Defending the American Dream Summit last week got a chance to talk with Dr. Arthur Laffer, discoverer of the Laffer Curve, and architect of Speaker Richardson’s G.R.E.A.T. Plan.
Dr. Laffer faced a fairly skeptical crowd over this plan. The general consensus among the group was that centralizing revenue collection at the state level and trusting the General Assembly to send it back to the municipalities is a bad idea. I agree with that. However I’m also a pro-growth capitalist and wanted to see if there was any economic data that might support the GREAT plan as a pro-growth measure.
Dr. Laffer made a case that elimination of the property tax would benefit the Georgia economy. It would help the housing market recover by making Georgia properties more economical vis-a-vis the rest of the nation. He also made the case for the revenue neutrality of the GlennTax.
Many of the attendees asked about the Georgia Income Tax and why we aren’t targeting that tax first. Dr. Laffer said that the decision to go after the Property Tax first was a political decision made by the Speaker. According to Dr. Laffer’s explanation, the property tax is the only tax outlined in the state constitution, and as such he said that the Speaker wanted to get rid of that one first. Elimination of the income tax can be done entirely by statute (presumably at a later time).
The thing that sold me against the GlennTax however, is the fact that Dr. Laffer believes that both the GlennTax and an elimination of the income tax would produce the same economic growth benefit. If that is the case, why strip the local municipalities of their ability to raise revenues to the degree they see fit. If Nancy Pelosi proposed we get rid of all state taxes and have the US House of Representatives decide how much of that revenue the state of Georgia got we would be up in arms.
This nation was built on the premise of the government that is closest to the people works the best. We can point to plenty of examples where centralization has reduced local control (US Dept. of Education), why do we want to do that here in Georgia?