As Jon reported, Rep. Tom Kirby introduced his “Georgia FairTax Bill,” H.B. 208, in the House Wednesday with visiting members from Georgians for Fair Taxation in attendance. The FairTax is meant to replace income taxes with consumption taxes. Putting aside Fairtax issues of regressivity, there’s a bigger problem with this bill. While it meets the “raise consumption taxes” test, it fails to actually eliminate the income tax.
That’s right: Rep. Kirby and his fellow Georgia GOP co-sponsors have put forth a bill to raise the Georgia sales tax to 7.5% while not dedicating a single section to repealing the state income tax. When you consider how much our sales tax brings in, this means Georgians would face a nearly $5 billion tax increase if H.B. 208 was signed into law as-is. Maybe keeping the income tax was in response to Charlie’s column on how high “FairTax” rates would have to be to still fund our state?
But now that some Georgia Republicans have filed a nearly $5 billion tax hike, it’s fair to say that there’s some room for compromise here. There are less dramatic options to raise enough annual revenue to fully fund K-12 education, expand Medicaid, and put some brand-new revenues behind transportation. Fully-funded schools, half a million more insured, and improved infrastructure – not bad at all for a fraction of the cost to taxpayers as Rep. Kirby’s bill!