Rep Carson Presents GA Tax Reform Bill

Representative John Carson is appearing now before the House Ways and Means Committee.

His bill drops the personal income tax rate from 6% to 4%, the corporate tax rate from 6% to 5%, and eliminates many tax credits/deductions while increasing sales taxes by 1% statewide.

You can watch the livestream here.

Rep Carson’s presentation can be found here. (H/T Aaron Sheinin)

The committee has adjourned for lunch and will return at 1:30 for a discussion on a “sale tax issue”.  Chairman Jay Powell said before the break that the next step for them is to review and digest today’s materials, and meet back in 10 days to 2 weeks and make some “policy decisions” on how best to proceed.

13 comments

  1. gcp says:

    Caught a little of the video and Carson makes a strong case but because I also favor slowly moving to a sales tax , what else would I say. Carson has done a lot of research to avoid replicating the Kansas mess. Interestingly, Carson’s bill does not cover services.

    For those of you that love the traditional income tax (often because you don’t pay income tax) well you can just ignore the whole thing. For those want to move a different system of taxation, you need to pay attention.

    • Charlie says:

      A tax on services is an income tax for those that provide the service. The economic incidence graphs are identical whether you call it a sales tax or an income tax. So if you switch from a 6% income tax to a 7-9% tax on services (as would happen if you extend sales taxes to services as assume locals do too) you’ve actually increased taxes, not cut them, from the perspective of those that provide services (accountants, lawyers, hair dressers, and those that break out labor separately on invoices, i.e, mechanics)

      • Boredatwork says:

        I’m still waiting to hear a Republican tax proposal that doesn’t have blatantly obvious shortcomings like those you identify and that accurately takes into account the costs of transforming systems that have been in place for decades (basically what they correctly point out Obamacare supports failed to consider). Pretending there’s a magical, simple solution to taxation is moronic and prevents a reasoned discussion of viable reform.

        • Charlie says:

          I listened to the presentations made and I didn’t hear any claims made that were pie in the sky. KSU economist Roger Tutterow even went through a discussion of how a 1% in income tax cuts won’t generate enough taxable economic activity to replace the revenue lost. There is an elimination of some deductions and an increase in the sales tax to make up for the proposed income tax cuts. There was also a lot of discussion of what Kansas did wrong and NC did right with their recent attempts at reforming their tax structures.

          All in all, it seems to be a serious document with all understanding the ramifications, with an awful lot of talk on making sure Georgia doesn’t jeopardize the AAA bond rating in the process.

        • Scarlet Hawk says:

          I’m still waiting on an actual fiscal note. Lovely presentations do not actual policy make.

  2. jbsimpson81 says:

    Spot on Charlie. Not to mention that some of the services you mentioned, like lawyers and CPAs can be done in other jurisdictions that don’t have “sales” taxes on services. Ultimately, we are making service business domicile din Georgia less competitive. That’s not good for economic development.

    • FranInAtlanta says:

      I have often suspected that Atlanta would be the financial capital of the South (instead of Charlotte) if we had not had a rule against banking over state lines.

  3. Three Jack says:

    My new favorite rep, thank you Rep. Carson. At least the conversation is started which is a major step after GOPers promising to do this for the past decade.

  4. John Konop says:

    Food for thought:

    As our population is aging via the “baby boom” generation, amount of people on a ratio working lessoning, paying income taxes in, verse an increased aging population, combined with 50% of people working below the poverty line…a real math problem. The expense associated with healthcare, ambulance service…..associated with an older generation is on the rise….especially healthcare related ie Medicare/Medicaid. We all know in the current system people only pay about 25% of the cost of healthcare now on Medicare….Obviously unsustainable, and problem is only getting worse. Finally one way or another the state and federal government will have to pay more, and cut back expenses per patient on a macro.

    I do think if we did this in conjunction with the FEDS reforming the tax system it could work with a few modifications:

    Statewide:

    We could take use the sales tax use for healthcare match needed with Medicare/Medicaid. We could than lower the amount off income taxes used today, plus eliminate all write offs.

    Federal:

    We could end payroll taxes and replace it with a VAT or NST.

    We could once again flatten tax rates with no write offs. Also we could raise minimum wage above the poverty line. And lower tax rates federal and state by the amount we save in welfare.

    • In a perfect world, we’d tax unimproved value of land heavily (land is essentially the one thing a tax can’t destroy, so very solid base) and we’d pair that with some sort of VAT style consumption tax. Alas the world ain’t perfect. Tax reform is tough to do, seeing as how everyone by default has organized their activities around the status quo and it’s much tougher to convince people of the theoretical benefits of a change than it is to remind them of the known costs of one.

      • John Konop says:

        Chris,

        You are missing a key problem….payroll taxes cannot sustain a baby boomer generation. Seniors need to contribute more to thier entitlments, especially with the savings rate of the average senior. And we must cut cost for healthcare ASAP. It is mathematically impossible for the people working with a growing ratio of seniors ( baby boomers) for workers to pay 75 percent of thier cost of healthcare ( Medicare/ Medicaid). That is why replacing it with a NST or VAT would spread the cost to everyone and tourist…..Also it would increase consumor spending, spurring more jobs, and tax revenue for entitlements. Combine this with some belt tightening you could fix the problem.

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