Tax reform on hold for now

I have mixed feelings on this, but the tax reform plan that Republicans in the state legislature had been pushing is dead for the session. Estimates indicate that it would have been a $220 million net tax cut.

The reason I say it I have mixed feelings is because House leaders were pushing through major tax changes while essentially shooting from the hip. As I understand it, the bill was revised at least a dozen times in the week or so. That sort of fly-by-night tax reform was reminiscent of ex-Speaker Glenn Richardson’s ill-fated GREAT Plan during the 2008 session.

The problem was there was no real effort to educate the public or, at the very least, grassroots organizations – tea party groups and others. Some groups, such as the Georgia Tea Party Patriots, were able to demagogue the bill before it even really had a chance – arguing that the sales tax changes and the limitation of income tax deductions, which were later broadened to address this latter concern, would hit middle class taxpayers in the state.

The plan, which was profoundly better than the recommendations handed down by the Special Council on Tax Reform and Fairness for Georgians, won praise from Grover Norquist, president of Americans for Tax Reform, “The final product is something conservatives in the state can support: a serious eduction in marginal tax rates that does not grow the size of state government.” Americans for Tax Reform slammed the original version of the proposal in January as net-tax hike.

Kelly McCutchen, president of the Georgia Public Policy Foundation, has also exalted the principles of the proposal, calling it a “pro-growth reform” that “will be a boon to small businesses and entrepreneurs, foster job creation and put us in a position to take another major tax reform step in the near future.”

Speaker David Ralston has said that tax reform could be part of the summer session that will be mostly spent on redistricting. Stay tuned.

1 Comment on "Tax reform on hold for now"

  1. Arrowflinger | May 4, 2011 at 7:04 pm |

    The ‘tax reform’ was a sham that eliminated tax exemptions for people and doled out new ones for business.

    The people are hurt by any move to a sales tax, as long as the FED is stoking the fires of inflation by monetization. Why anyone would want to pay a sales tax that goes up with the FED’s inflation tax is incomprehensible.

    Some of the rationale being thrown around about bringing Georgia into conformity with neighbors simply was not true.

    The way the package was to be rammed through was like something the GOP accuses Reid, Pelosi and Obama of.

    Emulating Florida tax law would be best, but that would mean industry pays sales tax on everything, just as do other consumers, and the lobbyists here want no part of that.

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