Morning Reads 4/8/2013

Welcome to another week.

Sam Olens advocates “Texas-style taxes” at Cobb GOP breakfast. I thought he was talking about toast. (I also take this as a sign he is looking at the Governor’s mansion.)

Some folks from Georgia won some music award at some country–perhaps western–music award thing.

Let’s charge five dollars for those free welfare phones! Five dollars, unlimited calling! When can I switch plans?

High hopes for UGA after G-Day.  Meanwhile, the Ga Tech Buzzters were injured. Most of them, at least.

Populism is gaining traction in Georgia politics. . . wait, when did it ever leave?

Jim Galloway thinks college kids will be allowed to tote pistols on campus after next year.

Savannah company named Georgia’s small manufacturer of the year.

A story involving pitbulls, a stabbing, a pet hog, and a trailer park. I just stepped up our level of culture here. You’e welcome.

Key witness claims they lied. Oh boy.

Why Georgia needs the marketplace fairness act.

Here’s some music. Now go enjoy your Monday.

29 comments

  1. sockpuppet says:

    Ah Olens.

    ““Texas by far is the most business-friendly state,” Olens said. “They haven’t had a recession.””

    Because they have the oil and gas sector that Georgia doesn’t have, and because the price of oil has consistently been over $90 a barrel. Let the price of oil drop to $25 a barrel like it generally was doing the 1990s and then let us see how great the Texas budget picture looks.

    “Georgia’s neighbors, Florida and Tennessee, don’t have an income tax, Olens said.”

    Florida has tourism. We don’t. Florida has multiple major metropolitan areas, we don’t. And the idea that Georgia should emulate the Tennessee economy is laughable.

    ““Georgia can hardly sustain a 6 percent income tax if businesses can skip across the border into neighboring states like Florida, Tennessee or South Carolina,” the authors wrote.”

    They always have and will continue to. The reason is that Georgia has the highly educated workforce and the urban/suburban livability needed to attract businesses, from entrepreneurs to established corporations. If all businesses wanted was lower taxes instead of top end talent and being located in places where people actually want to live, Silicon Valley and Wall Street would have left California and New York for Mississippi decades ago.

    What Olens – and the article – didn’t mention was that eliminating the state income tax meant a vast increase in sales taxes. And for good reason. When Bobby Jindal acknowledged that eliminating the income tax would send the sales tax sky high, his popularity plummeted and the plan is now dead. When asked about the sales tax issue, Shafer stated that the new jobs would offset the negative effects of the increased sales tax. Ummm … not if you are a worker making $40,000 a year. Even if it would help more people get jobs that currently don’t have them, it would still result in low to moderate income people – the vast majority of Georgians – paying substantially more in taxes. To put it another way, virtually everyone outside of metro Atlanta would have a much higher tax bill and receive no economic benefits. No, this wouldn’t cause jobs to come to “the other Georgia” because eliminating the income tax wouldn’t address the reasons why jobs aren’t there now, which is the decline of the manufacturing industry and most agricultural jobs – including family farms – being made obsolete due to technology and globalization, and the lack of skilled labor and infrastructure to attract new industry. Tech companies and banking startups won’t pop up in or relocate to Tifton or Americus because of a lack of a 6% tax, because that 6% tax won’t create Ajax programmers and Oracle administrators in Americus or investment bankers and finance managers in Tifton.

    Some of this is ideological … the belief that the 47%, the takers, aren’t “paying their fair share” and “have no skin in the game.” Fine. The way to change that is to increase the amount that they pay in state income tax, not to implement a policy where upper income people get a large tax decrease and lower income people get a massive tax increase, and EVERYONE’s purchasing power and discretionary income takes a large hit.

    Stuff like this shows that modern conservatives really don’t get or have no interest in the original Reaganomics. What worked with Reagan in the 1980s (and by the way Reagan DID NOT impose substantial tax increases on hourly and blue collar workers) back when our economy was totally different will not generate jobs outside of metro Atlanta, and it is debatable how many jobs it will create in metro Atlanta.

    • Rambler14 says:

      “What Olens – and the article – didn’t mention was that eliminating the state income tax meant a vast increase in sales taxes.”

      Exactly.

      Go to Nashville, TN! 9.25% sales tax

    • gcp says:

      And how do you explain New Hampshire, Washington state and S. Dakota all of which have little or no income tax? “ Florida has multiple major metropolitan areas, we don’t.” And how is this related to a sales tax? And do we have a “highly educated workforce” or are the vast majority of Georgians “ low to moderate income people “? “ The way to change that is to increase the amount that they pay in state income tax” Huh? That’s the problem; criminals, illegals, non-profits, some of the self-employed, all of which currently pay little or no state income tax. The way to tax these groups is a sales tax not an income tax.

      • I’ve never understood that Fair Tax argument that basically says to the average Joe out there hey you should pay more money in taxes so that we can also make these other people (drug dealers) pay more money in taxes. Wouldn’t the truly conservative response be to bring the hammer down on those doing illegal behavior, not socially engineer the tax code around them?

        • gcp says:

          The current code is all “social engineering;” the fair tax is not. As for the “average Joe” he would pay the same rate as everyone else.

    • MattMD says:

      Ok, so let’s have a “Fair Tax” wet dream and eliminate the state and federal income taxes. What would the effective exclusive (state and federal) sales tax be at that point? 40%-45%?

      These are not real solutions.

  2. Noway says:

    While not on the reading list, Obama is coming after IRAs. $3 million cap. It’s a fairness issue, don’t you know. It’s only on the rich, you know! Class warfare works every time it’s tried. The pitiful, sainted, VOTING poor must be served.

    • Oh please. If you have $3 million in an IRA you are rich. There are no poor people walking around slogging it out day to day at the factory waiting for retirement when they can tap their $3m IRA. Give it a break.

        • Well the whole point of the tax free/tax deferred IRA is to encourage people to save for retirement. I’d say once you have $3m in an account, the government probably has better things to spend its additional money on than continuing to subsidize that. You made it a class warfare thing with your comment, not me.

          • Noway says:

            So you’re ok with the gov’t limiting how much someone can have in a tax free account? Doesn’t matter how much you have $3.00 or 300 mill. If it’s my money that I’ve earned and I choose to contribute to a tax free retirement instrument that has ALWAYS allowed a tax free contribution and accumulations without limits…until now, because of some God damned “fairness” rational, then that is a class warfare bomb lobbed at the producers. Let appease the metastatic cancer that are the poor.

            • Since the government imposes the tax, yes I don’t have a problem with them deciding how much can be sheltered from taxes. We can debate on whether it should be $3, or $3m, or infinity and beyond, but philosophically the government is the one doing the taxing.

              And before you go on blabbing about what has ALWAYS existed, take a deep breath and stop hyperventilating. You’re really showing your ignorance. IRAs didn’t even exist before 1974, 401k’s came on the block in 1978, etc. You may have “trusted” the government that they’d never take back their promises on the tax treatment of assets in one of these accounts, but you should be smart enough to remember that the only guarantees in life are…death and taxes.

              And by the way, you’re crazy if you insist that there’s no difference between $3 and $300 million. If everyone was retiring with $3 million or $300 million in assets, there would have been no need to incentivize retirement savings with preferential tax treatment in the first place. The whole reason these accounts were created in the first place was because companies were shifting away from defined benefit pensions and the government, all things being equal, would rather have people not enter into retirement at or near poverty and decided that it was cheaper to give tax credits to encourage personal savings – which people definitely do not do on their own in taxable accounts sufficiently.

              As with any government tax credit like this – see also the mortgage interest deduction – there’s a limit to the value derived from the tax savings to the government. Once you have $3m in your retirement account, you are probably going to save or invest extra money in your regular taxable brokerage account without the government prodding you to do so with a tax saving. When you have $3k in your retirement account, you probably won’t do either without the tax credit. Same as with encouraging someone to buy a house when they’ll be able to save a few thousand in taxes due to the deduction, once you are buying a $100m house we probably have better things we can spend our tax revenue on.

              The whole point of our politics is tradeoffs – that’s why we don’t either move to full on libertarianism on one end or socialism on the other. And finally to solve our long term deficit problems, you’re likely going to see changes to institutions whether they be retirement accounts of medicare that will leave each looking different than they do now. Sorry if you are brushing up against this proposed limit (Which will likely never happen anyway) but then again, why am I supposed to keep subsidizing your wealth with my tax dollars if you’re not in any danger of retiring in poverty?

              • Noway says:

                Seems you were the only one hyperventilating, Chris. Reread my post. I never said the IRA tax break instrument had always been there. I said the IRA had always allowed a tax free contribution with no limits as those contributions accumulated. Now, the socialists are saying that 3mill is enough to have in your retirement accounts. Says who? It ain’t the govt’s money. It’s your and mine and the neighbors to the right and left of me. Who is the gov’t to assign an arbitrary cutoff and after that the tax break no longer applies? The wealth belongs to the one who’s labor and talent has resulted in its finding its way into his/her pocket. I don’t want the gov’t to say that after a certain amount, tax benefits no longer apply because it has been deemed that you’re too rich. I don’t wont Chipper or Julia Roberts or Madonna or Ted Turner to have limits imposed on them even though they are considered wildly successful. All I say is good for them. It’s their cash to invest or spend however they wish. I don’t want limits on any damn body. I don’t want, as Obama said to Joe the Plumber in 2008, the gov’t to confiscate the wealth of others to “spread around.” That is vulgar and obscene.

                • Have you ever heard of the AMT? We limit deductions all the time on all kinds of things, why should retirement savings be special? Or ask any new lawyer about the phase out for tax deduction on student loan payments. This stuff isn’t new.

      • seenbetrdayz says:

        That was definitely one of her finest moments. As expected, it pretty much went over half of the heads in that assembly, but it was nonetheless a fundamental explanation of the liberal mindset.

        It’s about the gap between rich and poor, you see? Nevermind whether each person is better off as an individual. We have to control the gap, and if it means making everyone equally poor, so be it.

  3. saltycracker says:

    $5 foot long, no….unlimited phone…..Why do we need legislation and public funds when cell phones can call 911 with no plan ?

  4. saltycracker says:

    “Marketplace fairness act” Gotta love the names our legislators come up with and their rationalizations.

    “There is no reason why Internet companies shouldn’t have to collect and remit sales taxes.” (OK)

    “Their Main Street competitors certainly do; even the smallest of local retailers dutifully collects this tax on every sale. ” (Not exactly – many small retailers waive or don’t remit sales tax, particularly with cash transactions and big retailers can minimize it via service installation)

    Sales tax is sometimes collected based on the buyers residence, sometimes from the point of sale and sometimes not at all.

    Recent:
    Appliances – Home Depot – sales tax based on delivery – second home address
    Hot water heater installed – Lowes – No sales tax
    Misc stuff – Amazon on line – no sales tax
    golf shoes – Dick’s on line – sales tax on shipping location
    small item – antique store – if cash, no sales tax

    Sales tax was not a deciding factor in our buying decision.
    Amazon – no sales

    Software exists to resolve the issue however the legislators wish.

    • The antique store could still be paying sales tax, just on a reduced sale amount thanks to this deal they offered you. At the end of the day, if they’re playing by the rules, they really just gave you a 7% discount and added tax to that (or whatever the numbers work out to).

      • saltycracker says:

        Awwww….hard to be critical with that icon….but maybe you cut out the leaping pit bull in the background…….There are those making a boat load of money lending to small businesses at high rates of interest…..not that they couldn’t give the bank a sound financial statement but because they are (opinion) skimming cash……

        • No argument that lots of businesses are avoiding tax by using cash just giving the benefit of the doubt to the mom and pop antique store that they’re probably paying most of their taxes.

  5. MattMD says:

    Georgia has hopes after a scrimmage? Hey, get back to me after those perennial underachieves are planning for a Capital One Bowl in late September.

  6. sockpuppet says:

    @gcp:

    “And how do you explain New Hampshire, Washington state and S. Dakota all of which have little or no income tax?”

    Compare the population, demographics and population of New Hampshire, Washington state and South Dakota to ours, genius. The only one that is anywhere near our ballpark is Oregon.

    Florida has multiple major metropolitan areas, we don’t.” And how is this related to a sales tax?

    First off, you left off the tourism. Second, yes it is relevant. Florida has a much more diverse economic base than ours. Tourism and entertainment in Miami, aerospace and technology in Tampa, more tourism in Orlando, a transportation hub in Jacksonville, manufacturing in Pensacola … it is apples to oranges.

    And do we have a “highly educated workforce” or are the vast majority of Georgians “ low to moderate income people “?

    Metro Atlanta: highly educated workforce, which is why the high paying jobs are in Gwinnett and Cobb instead of Macon and Albany. And by the way, with increasing defense cuts, the economic picture is going to get worse in places like Warner Robins, Macon, Columbus, Albany etc. where military installations provided high paying jobs, not better. Yes, outside of metro Atlanta, the vast majority of Georgians are low to moderate income people.

    “The way to change that is to increase the amount that they pay in state income tax” Huh? That’s the problem; criminals, illegals, non-profits, some of the self-employed, all of which currently pay little or no state income tax.

    OK fine. Make our budget and economy beholden to criminal behavior. What if immigration reform gets enacted and we do as good a job in reducing crime as New York City did. Where’s the revenue going to come from then? Also, most people who will pay substantially more taxes aren’t criminals. They are going to be hourly workers and those on fixed incomes. Again, those people are going to pay much more in taxes and aren’t going to benefit.

    All this plan does is benefit one (much larger) group of people at the expense of a (much smaller) one. Look, I am not arguing for progressive taxation here. That isn’t my argument. My argument is against cutting taxes on high income people so that you can raise it on hourly workers. Those low and moderate income people making less than $40,000 a year won’t benefit from a substantial tax increase in any way. You guys know that it is true, so that is why you won’t talk about it. And I ask my question again: what is so wrong with having low and moderate income workers pay the same income tax rate as you do? The answer: nothing. But that isn’t what you want. You want to triple the taxes that cashiers, janitors, paraprofessionals, etc. – some of whom work 2 and 3 jobs to make ends meet – have to pay so that you can get a huge tax cut because, well, you are more hardworking and successful than the person who works as a janitor 5 days a week and unloads trucks on the weekend so you deserve it. So that is why you are fine with taking a huge tax cut that will force that blue collar guy that is working two shifts to pay significantly more for food, medicine and everything else.

    Again, this is not Reaganomics. Reagan cut taxes for everybody and so did Bush. I don’t have a real problem with that … my problem was that both failed to cut spending and huge deficits were the result despite booming economies. (Why didn’t they cut spending? Because it was politically unpopular and they wanted to get re-elected. That is why Paul Ryan never proposed his Ryan plan while the GOP was in power … he knew that the only results could be negative. Instead he waits until a Democrat is in the White House in order to try to pressure him to make the unpopular cuts to major entitlement programs that the GOP never did. Same deal with the Contract With America). But I do have a real problem with cutting taxes for one group while raising it substantially for another. No, I don’t like it when they do it for the rich either. I don’t agree with 70%, 60%, 50% or whatever type rates for the rich simply because “they can afford it”, and yes I am more than willing to give up the Earned Income Tax Credit if it is part of an actual plan to reduce the national debt that EVERYONE takes part in (which means eliminating all these shelters and closing all these loopholes … even if the downside will be a huge increase of unemployment among accountants and tax attorneys). The irony gcp is that I am “fairer” on taxation than you are.

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