Income Tax Cap: Voter Pandering or Defensive Move?

In addition to the top of the ticket Governor and Senate races and the other offices that will be voted on in November, voters will decide on an amendment to the Georgia Constitution. It reads, “Shall the Constitution of Georgia be amended to prohibit the General Assembly from increasing the maximum state income tax rate?”

The question is a result of Senate Resolution 415, which was sponsored by Senate President Pro Tem David Shafer. It would keep the maximum income tax rate at 6%, and it has been endorsed by many as an incentive for companies to locate in the Peach State. It is also seen as an incentive to discuss tax reform in general, and a possible consumption based FairTax at the state level.

In a recent article, the AJC called the ballot proposal a way to drive Republican voters to the polls.

During debate on Shafer’s proposed amendment last session, Senate Minority Leader Steve Henson, D-Tucker, said, “We are doing this, as we often do during an election year, to make a claim or make a boast that we’ve done something. The only reason we’re doing it is so we have a campaign tool during an election year. It’s not a pressing problem.”

Nonetheless, some of Henson’s fellow Democrats supported the measure. Sen. Jason Carter, D-Atlanta, the party’s nominee for governor, voted to put the issue on the ballot when Shafer’s resolution came before the chamber Feb. 24. When it was up for final approval on the last day of the session, Carter was the only senator who didn’t vote, although it passed easily without him. Carter’s campaign said last week that he supports the amendment.

When asked about the politics behind his amendment, Shafer said, “It’s designed to encourage people to create jobs here. People who have jobs tend to vote Republican, so anything we can do to create jobs is helpful politically.”

If the goal of the amendment was to drive voters to the polls, it’s not an issue that has been brought up too loudly on the stump, which is what one would expect if it were being used as a wedge issue.

Instead, it’s quite possible the measure was brought up as a preemptive move should the Democratic party take control of the Governor’s Mansion, and eventually, the Gold Dome. Before their website went down, Atlanta Progressive News had a story noting that the cap would limit the ability to make the income tax more progressive.

Based on recent polling by Landmark Communications, Democrats may understand the threat. When the firm asked likely voters if they would vote for the amendment, yeas outpolled nays 48% to 27%, with 25% undecided. But while the measure received strong GOP support with 64% for, 15% against, and 22% undecided, Democrats were in opposition, with 34% for, 39% against, and 27% undecided. Independents and supporters of other parties were more supportive of the measure than the Democrats were.

House Bill 990 took away the ability of a governor to opt in to the expanded Medicaid program envisioned as part of the Affordable Care Act. When it passed, some viewed it as a way to limit the options of a future Jason Carter governorship. Is the income tax cap the same type of defensive medicine?

23 comments

  1. It’s a win-win for Georgia taxpayers and companies that will safeguard the fruits of their labor and help keep government honest. With initiatives such as these, we can leverage solutions that will keep Georgia competitive.

    Whoa. I don’t know what happened to me there. (shakes head) It’s pandering.

    • Michael Silver says:

      Its not pandering, its an amazingly SMART limitation.

      If the government can take by force 6% of what you own or earn, what stops it from taking all of it? This limitation protects all of us, our future, and Liberty.

      Senator “I believe” Carter seems to have avoided voting a lot. He didn’t vote for this bill/amendment. He also avoided voting for HB826 which allows Licensees to carry guns in University System property.

  2. View from Brookhaven says:

    If this passes (which it will), what will Reps run on in future years if “The Democrats are gonna raise your taxes!” is off the table?

  3. NoTeabagging says:

    “If the government can take by force 6% of what you own or earn, what stops it from taking all of it? ”
    The “open carry” law will solve that.

    Seriously, this is a procedural issue that does not belong in a Constitution. The legislature needs an expedient way of revising tax rates, if necessary, to fund government around variables such as sales taxes and federal taxes. Passing this would give legislators the same excuse they used after TSPLOST, “The people voted against taxes. We give you less services and less protection in return.”

  4. blakeage80 says:

    This amendment may be pandering, but it has the real effect of limiting how much of our income the State can take. I’ll vote for that all day long. It also limits the ability of Democrats to take more from the successful among us with higher incomes (AKA “The Rich”) and redistribute it to buy votes.

  5. Max Power says:

    Stupid stupid stupid, I would gladly trade a 1 or 2% increase in income tax for the abolition of property tax. Wouldn’t that be grand? Actually being able to own your property without paying rent to the government.

    • FranInAtlanta says:

      Yes, our property tax was lowered several years ago as, I think, sales tax was raised (DeKalb). Property taxes are back to where they were and sales tax is still raised.

      • Max Power says:

        Right so if you want a constitutional amendment about taxes, have one that abolishes the state’s power to collect property tax.

  6. John Konop says:

    I tend to support pushing the cost of the transaction to a user fee model over taxes in general…..The can becomes an issue, when it becomes a replacement for lower taxes verse it being for proper allocation for cost. This starts a trend where police forces use this as a way to grow becomes a drain on the economy….We have seen in the War on Drugs policy, 3 strikes and you are out, traffic tickets….This type of policy attacks personal freedom…which conservative or liberal we must be careful….we are not opening more doors by this knew proposal….

    This is just one of many examples.

    States With the Highest Rate of Issued Speeding Tickets: We are number 2!

    http://ezinearticles.com/?States-With-the-Highest-Rate-of-Issued-Speeding-Tickets&id=7397123

    Most Expensive First Offense: We are number 1!

    (Tie) Georgia, Illinois, North Carolina, Nevada and New Hampshire:

    http://www.zrxoa.org/forums/showthread.php?298884-The-Worst-States-For-Speeding-Tickets

  7. The current polling numbers on the Tax Cap Amendment are as follows:

    Among self-described Republicans:
    Support 64%
    Oppose 15%
    Undecided 22%

    Among self-described Democrats:
    Support 34%
    Oppose 39%
    Undecided 27%

    Among self-described Independents:
    Support 44%
    Oppose 30%
    Undecided 26%

    Among self-described Other:
    Support 41%
    Oppose 34%
    Undecided 25%

  8. Jon Lester says:

    I’ve spent some quality time in Montana this year, one of four states with zero sales tax (or five, if you count Alaska, which allows county and municipal sales taxes). I get that some people like consumption-based taxation because everyone shares the burden, regardless of bracket, but it really is regressive for lower-income people, and as a former retailer, I can tell you it’s not exactly a joy to collect it and report it.

    (I’ve also just given you two reasons why the “Fair Tax” will never leave the realm of fantasy, but I digress.)

    I probably will vote for this constitutional referendum, gimmicky as it may be, because it at least appeals to the idea of restraining the coercive power of the state and limiting its growth, but I’d also like to see real alternatives to the current system. I think I could stand to pay another quarter for the occasional Kaopectate, if the kaolin severance tax were raised, and if the price of sheetrock were to rise because of a higher gypsum tax, then maybe some contractors would be less wasteful.

    • FranInAtlanta says:

      The positive about consumption tax is that it hits those on the book and off the book equally. The negative is that so few notice it (including me).

  9. objective says:

    this amendment is a double-edged sword. it seemingly protects your tax dollars, but also hinders the abilities of your government. that could result in a real fiscal crisis or loss of services if the budget is not well-balanced (as in not balanced in name only, or as between spending choices). but since we’ve been at 6% for a while (anyone know offhand?), it’s really not likely to have much effect, thus the claim of pandering. i think the research on these types of measures tend to show that state or local governments will just find a way to make up any lost revenue in other ways. so i wouldn’t be surprised if an income tax cap causes a sales tax hike, or local Boards of Education to raise their millage rates.

    • David C says:

      I’m generally opposed to things like this that enshrine temporary policy fixtures in the constitution that can be impossible to repeal. That way leads to problems like California’s, where a property tax measure appropriate to the 1970s ends up hamstringing finances during a recession 30+ years later. It’s too specific and harms the flexibility you need in a crisis.

  10. Slight of hand. Sure, you can cap income tax. But the burden shifts then on professionals who will have to pay higher fees for licensing , or ‘tweaks’ in the payroll tax reporting. Heaven forbid an increase in the sales tax (I PROMISE you they will go to that tactic first in a crisis, because the 6% won’t cut it when the reactors melt down).

    Also what does the inflation index do with this cap? If the dollar loses 20% of its value, what happens then?

    Sounds like , like Henson said, this is the do-nothing legislatures ‘signature legislation for The People™’ a la, unconstitutional gay marriage bans, etc.

    Even within the ranks of the GOP, there is hesitation. They tend to trust the herd and the chum it produces, but something is not quite right that this issue requires a constitutional amendment.

    Want to get real about this? Abolish the income tax, the sales tax, OR the property tax. Pick one or GTFO with your ‘fuzzy slipper’ legislation.

  11. blakeage80 says:

    I think it would be sweet if we abolished the income tax altogether. If I recall correctly, GA didn’t raise the income tax during this last crisis. They raised other taxes and fees along with major spending cuts to things like education and the DOT. I think taking away sweeping tax increases as an option for dealing with hard times is a smart thing to do. One of the things we should probably ask candidates from now on is how they would handle financial hard times in terms of tax increases and spending cuts (as well as how they would handle surpluses). We could then know some more about their priorities. This law would force them to think in that way.

  12. saltycracker says:

    The more you raise the ceiling, the more there is to manipulate. It’s what politicians do.
    And when the can’t they cut services to the ones that pay the taxes rather than address the manipulations.

    Fix the tax code.

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