The GREAT Plan
I have been critical of the so-called "GREAT Plan" from its inception. Despite the pleas from its supporters, I have not kept and do not plan to keep an open mind about this plan. Although I support tax reform/elimination, my greater concern is the size and scope of the federal and state governments.
The GREAT Plan is fundamentally wrong when it comes to decentralized government. County governments are funded primarily through property taxes, although they also receive revenue through SPLOSTs, and appropriations bills at the state level. But property taxes are a county's main source of revenue.
The GREAT Plan would eliminate all property taxes, and replace them with a "revenue neutral" sales tax. At first glance, this doesn't seem like a bad idea. You get rid of the tax on property, and replace it with a tax on consumption. In other words, you are taxed on your activity, not on your success. Unfortunately, this is where the love affair with the GREAT Plan ends.
Here are some fundamental points that the GREAT Plans proponents, like Earl Ehrhart, consistently fail to address:
(1) If you replace one tax with another tax, you're not really cutting taxes.
(2) If you eliminate property taxes, local governments only have SPLOSTs, and Appropriations to fall back on.
(3) Since the so-called "GREAT Plan" is supposedly revenue neutral, the money that would have gone to local governments via property taxes, will now go to the state coffers in the form of sales taxes.
(4) There is a limit on the amount of SPLOST taxes a governing body can institute
Given these facts, the only way to replace the lost revenue at the county level would be for the county to come crawling to the state and beg for more money in appropriations. This is a fact that Earl and Glenn conveniently ignore.
Here are some other facts that Glenn and Earl conveniently ignore:
(1) We're well into our second term of a Republican-controlled government and Georgia already has the 2nd highest tax rate in the south east
(2) Spending has increased every year Glenn Richardson has been Speaker of the House
(3) Glenn Richardson and Earl Ehrhart refused to bring a bill by Representative Steve Davis which calls for the elimination of the state income tax to the House floor for a vote
(4) Earl Ehrhart deliberately lied to the public when he claimed that the GREAT Plan had the support of 80% of the people, when polls indicate that it only has 59% support
Given the fundamental flaws of the GREAT Plan and the piss-poor tax and spend history of our Republican-controlled legislature, is there any reason why we should keep an open mind about the GREAT Plan?
There are many things the state could require counties to do in order to be better fiscal stewards. For one, they could require counties and cities (since its the State that has the power to charter counties and cities) to institute zero-based budgeting. That would be a start. Or, if Earl and Glenn are truly serious about tax reform, they could look into getting rid of the state income tax and couple it with spending cuts.
The truth is, Earl and Glenn aren't serious about reforming our tax system. They aren't serious about reforming their own spend thriftiness. The only thing they are serious about is centralizing the state's money supply and increasing their own political clout. They are, at best, cut from the same mold as the big-government Republican ilk that currently inhabits the White House and infects the U.S. Congress. I share Erick's hope that someday we may actually have a Republican in the Governor's mansion, but more importantly, I hope someday we may actually have a Republican-controlled House of Representatives.
The GREAT Plan is nothing more than a blatant power grab on the part of Glenn Richardson. I refuse to keep an open mind about it, unless Glenn's minion, Earl Erhart decides to engage in open and honest dialogue about the true intentions of this plan and the effects it will have on local governments.
Comments
The AP article from yesterday explicitly states that it's a tax shift: "would eliminate most property taxes in Georgia and replace them by applying the 4 percent sales tax on goods and services that currently are exempt." No one I know is trying to obfuscate this fact. It's a simple tax shift. You decide how much you want to pay the government. If you want to pay a lot, go buy a Mercedes.
As to local governments "only" having SPLOST to fall back on... Why is that a problem? I'm sick and tired of wasteful government spending. The fewer sources of revenue they have, the better.
Tax dollars going to the state instead of the local government? As I understand it, every dollar will be returned to local governments.
There is a limit on the amount of SPLOST taxes a governing body can institute? Indeed! And the problem is...? I thought Republicans were supposed to be for low taxes. The only real people I know who are against this thing are local officials and county/city employees. Everyone else I know is for it.
Posted by: decon | November 6, 2007 09:01 PM
If Republicans are so concerned about overtaxation, they should look at eliminating the state income tax.
I thought Republicans are supposed to be for local control.
Using your logic, the Federal Government should just handle all taxing and give it back to the states as it sees fit.
Posted by: Jace Walden | November 6, 2007 09:56 PM
.. and using your slippery slope logic, the United Nations should do it.
But as to your "Republicans for local control" argument" I ask in all seriousness, local control of what?
The only thing I really care about having locally controlled is zoning. Everything else can be provided more efficiently, and with fewer of my tax dollars, at a higher level of aggregation.
We have fire chiefs, police chiefs, school superintendnts, etc.... out the wazoo in this state. I'd love to see all the local yokels in these positions thrown off of the tax teat. Local control of these things, in my opinion, means personal control. I want school vouchers and I'll supervise the choice of curriculum and pedagogy my self.
Posted by: decon | November 7, 2007 12:57 PM
Everything else can be provided more efficiently, and with fewer of my tax dollars, at a higher level of aggregation.
These are the same arguments used for everything from the nationalization of education to socialized medicine and for further abridgment of the Tenth Amendment.
Posted by: Jason | November 7, 2007 01:28 PM
Actually no, it's not the same argument.
The argument for "socialized medicine" is based on market failure. You might not agree with the argument they make, but the argument is based on market failures arising from transaction costs and asymmetric information.
In contrast, no one is claiming the "market" for fire or police service is failing. Everyone, well at least every adult I know, recognizes fire and police as a legitimate government function. The only discussion is what level of government can most effectively deliver those services, and most reasonable people, in addition to every economist I've ever read, don't think small towns are large enough to deliver these services efficiently.
As to "nationalized education" I don't know anyone who argues for that, so I can't comment.
So again I ask -- local control of what. I'm tired of seeing people use "local control" as a talking point without any apparent intelligent thought behind what they mean. Make the argument and I'm open to changing my mind. Otherwise, not so much.
Posted by: decon | November 7, 2007 05:34 PM
The Georgia Constitution provides for home rule, which gives sovereignty to individual city and county governments to decide what is best for their individual communities.
Centralization strips local control and sovereignty and puts power in the hands of the state legislature and the Governor. It also creates a welfare state for local governments.
I seriously doubt you'll change your mind. You only comment on posts dealing with the GlennTax...so it's obvious that you are only here to defend it.
The argument about healthcare was made within the last couple weeks by Hillary Clinton.
As far as nationalization of education...ever heard of NCLB?
Posted by: Jason | November 7, 2007 05:53 PM
As I understand it we are discussing a plan to amend the constitution. So of course the plan will be in contrast to what the constitution currently calls for.
You, and people like you give the Speaker and Erhart a hard time for not responding to your questions. And that would be fine. Except I show up, respond to you, and suddenly you don't want to discuss it further. And then you hide behind all kinds of excuses, and accuse me of being here only to defend the speakers plan.
As it happens, i'm more here to call BS on the "local control" nostrum, though I happen to be a huge fan of the idea of eliminating property taxes.
I could care less if "local governments" have a smaller or larger budget. I don't care who I pay taxes to, so long as the tax bill is as small as possible. I have no doubt that my tax bill will go down if property taxes are eliminated.
Posted by: decon | November 7, 2007 06:23 PM
I never said I didn't want to discuss it and I am certainly not hiding behind excuses. I am open to debate, but I am not going to let you get by with telling me you have an open mind when it is so obvious that you are either are already sold on the plan and are defending it or coming here to carry the Speaker's water. Either way it's fine with me just be honest about it.
accuse me of being here only to defend the speakers plan.
Is this not true? You only comment on threads that deal with this proposal. You have only voiced support for it. What other conclusion to do you expect me to come to?
Be honest and stop blaming me because I called you on it.
You, and people like you give the Speaker and Erhart a hard time for not responding to your questions.
I don't know that I have ever accused the Speaker of not answering my questions about the proposal...and I have not said a word about Earl Ehrhart.
I happen to be a huge fan of the idea of eliminating property taxes.
So do I...but not at the expense of local sovereignty and centralization of the state's economy.
I don't care who I pay taxes to, so long as the tax bill is as small as possible.
The tax bill will not be as small as possible, at best it'll be revenue neutral, as Earl Ehrhart said on Peach Pundit yesterday.
Posted by: Jason | November 7, 2007 06:33 PM
Ok I'll take you at your word.
You say you are concerned with local control. Local control of what?
Posted by: decon | November 7, 2007 10:56 PM
You're going to take my word? That's hilarious. You are the one here who has something to prove, not me.
Republicans are supposed to believe in self-government and local control.
Communities should be able to government themselves the way they see fit.
This proposal essentially strips local governments of their sovereignty.
I've have already said this.
Posted by: Jason | November 8, 2007 08:14 AM
There is, at times, a tension between efficient government and "local control". Republicans are supposed to stand for both. You are apparently uninterested in discussing this.
All I've done here is ask questions. All you've done is duck those questions, while questioning my intentions, repeating a talking point (LOCAL CONTROL), and implying I'm a shill.
So whatever. Cheers.
Posted by: decon | November 8, 2007 04:22 PM
All I've done here is ask questions.
That's a blatant lie.
I have answered whatever questions and comments you have put out here.
Posted by: Jason | November 8, 2007 04:27 PM