Georgia Senate plans to reduce or cut out income tax

Monday, March 11, 2013 4:18 PM
Last updated 10:36 PM
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ATLANTA — Senate leaders say they have the mechanics for reducing the state income tax and possibly eliminate it completely.

Senate President Pro Tempore David Shafer, R-Duluth, is sponsoring two constitutional amendments for changing the state’s basic tax policy.

“This is to start the shift from an income tax to a consumption tax,” he said.

If voters approve, Senate Resolution 415 would prevent the Legislature from raising the state income tax, and SR 412 would require that any increase in the sales tax go toward lowering the income tax.

Because the measures can’t go on the general election ballot until next year anyway, Shafer figures there’s no rush to pass them in the nine days remaining in this year’s session.

Though his proposals won’t automatically cut the income tax rates, he feels they’re a start.

“They are the framework,” he said.

Critics argue that raising the sales tax hurts the poor because a greater share of their income goes to necessities that can’t be put off, while the rich can skip discretionary purchases if they want to avoid the sales tax.

Unlike the FAIR Tax plan championed by some conservatives as a way to end the national income tax, Shafer’s concept doesn’t include special tax breaks for low-income people.

“That’s open to discussion as we go along,” he said. “This is just the starting point.”

All of the Republicans in the Senate are co-sponsoring the amendments and they make up the two-thirds vote needed for passage there, so the measures are certain to clear that hurdle. How they would fair in the House is harder to gauge.

House Ways & Means Chairman Mickey Channell wasn’t familiar with Shafer’s amendments when asked about them Monday so he couldn’t offer an assessment of how his panel would view them. Republicans are one vote shy of having two-thirds of the House, requiring at least a Democrat or the lone independent to go along.

Nine governors are calling for the elimination of income taxes in their states. Georgia leaders have wanted to do it since Republicans took control of the state 10 years ago.

The reasons are that high-tech entrepreneurs say it’s easier to hire highly paid workers in states without income taxes and that selling out to a larger company is a tax-free event.

“The real issue is economics; you shouldn’t tax things you want more of,” said Kelly McCutchen, the president of the market-oriented think tank Georgia Public Policy Foundation.

Cutting or eliminating the income tax is tricky because it brings in half of what the state uses for operations. McCutchen said raising the sales tax from 4 percent to 6 percent, eliminating some deductions and raising the personal exemption to benefit the poor would allow for cutting the income tax by half.

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Dixieman
15330
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Dixieman 03/11/13 - 05:01 pm
3
1
YES!!

Dixieman will give up all his points if this passes.

dstewartsr
20389
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dstewartsr 03/11/13 - 05:24 pm
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0
Is it April 1st Already?

Anyone believing the Atlanta Maintainance Fund Collection Agency -- DBA Georgia Government-- can survive without these monies, I have some mountaintop lots for sale. In Florida.

GiantsAllDay
9695
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GiantsAllDay 03/11/13 - 06:32 pm
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I like this concept. I would

I like this concept. I would like to read and learn more in the coming days.

nocnoc
43449
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nocnoc 03/11/13 - 09:48 pm
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NO DON'T BUY IT

We can't allow the Sales Tax to go up and the Income Tax to still be in effect . What will happen down the road is common place. The next political party comes into power and keeps both, and raises the Income Tax again.

Instead we need a Ga. Constitutional Amendment banning any Income Tax, to be followed by an immediate replacement with an increased Sale Tax.

Dixieman
15330
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Dixieman 03/11/13 - 10:01 pm
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1
DIXIEMAN HAS INFINITE POINTS

I agree that a [Georgia] Constitutional amendment is necessary to keep the leeches from reinstating an income tax if they ever get back in power. But, nocnoc, doesn't the story say that that is what is being proposed here??

allhans
23773
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allhans 03/11/13 - 10:21 pm
2
1
The same old theme, the rich

The same old theme, the rich don't buy necessities..

palmetto1008
9782
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palmetto1008 03/11/13 - 10:36 pm
2
1
Sure, allhans, I buy
Unpublished

Sure, allhans, I buy necessities. But I sure save more more of my income than I spend on them. Hell, I may move to GA if this passes, I'll save even more. Let the poor suffer more.

Darby
26070
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Darby 03/11/13 - 11:05 pm
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3
Palmetto - Please stay ..

in South Carolina. Please...!!

rebellious
20916
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rebellious 03/12/13 - 12:39 am
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AT First Glance

be aware that border cities will be hurt from a retail standpoint. I have seen this in effect in North Georgia just below Chattanooga. What could....I say could happen in locations like Augusta is that retail sales will grow in SC where there is lower sales tax and retail sales will drop in Augusta where the sales tax is higher.

Buyer Beware.

Bodhisattva
6307
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Bodhisattva 03/12/13 - 07:33 am
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Is South Carolina sending

Is South Carolina sending lobbyists to Atlanta to push this?

soitgoes
820
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soitgoes 03/12/13 - 07:42 am
2
3
everybody buys groceries, clothes, gas

consumption tax is the most fair way to do it. Eliminate the tax loopholes that only the rich can take advantage of. Tax consumption and you rope in those on an "all cash" basis, like illegal aliens, drug dealers, tax cheats. Everybody's gotta eat, wear clothes, buy stuff. The rich buy more expensive stuff and thus would pay more in consumption taxes. How can this NOT be a good idea??

Bodhisattva
6307
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Bodhisattva 03/12/13 - 07:44 am
2
1
"“The real issue is

"“The real issue is economics; you shouldn’t tax things you want more of,” said Kelly McCutchen, the president of the market-oriented think tank Georgia Public Policy Foundation.""
Since our economy has shifted from manufacturing to consumer based, wouldn't a higher sales tax reduce consumption? Those in favor should look at Alabama where the bottom 40% are paying over 7% of their income on sales tax vs 1.1% for the highest earners.

Little Lamb
46405
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Little Lamb 03/12/13 - 08:15 am
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Seniors

Okay, it makes sense — during my working years I paid income taxes. As I approach retirement, they shift the system over to where I pay increased sales taxes when my income goes away. They're out to get me.

Little Lamb
46405
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Little Lamb 03/12/13 - 08:22 am
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1
Slogans

This Kelly McCutcheon person knows how to turn a phrase, but the message behind the phrase is fuzzy to me. She (he?) says, “The real issue is economics; you shouldn’t tax things you want more of.”

Well, is Kelly McCutcheon promoting the increased sales tax? Is she advocating taxing something (sales, i.e., consumption) that she wants more of? If you tax consumption, you will get less consumption. That might be a good thing.

Likewise, if you tax income, you will get less income.

Here's an idea, how about reducing the size and scope of government? Lower sales taxes and lower income taxes. Reduce government intrusion into personal freedom. Cut out the nanny state. Make people stand on their own two feet. Sink or swim.

itsanotherday1
43775
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itsanotherday1 03/12/13 - 10:21 am
2
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1. 'Po folks in Fla and Tenn

1. 'Po folks in Fla and Tenn seem to get along OK with no state income tax.

2. I don't think a 2%-3% savings will entice very many people to cross the river. Spending $5 in gas and maintenance to save $3 on a $100 worth of clothes or groceries doesn't seem like good economics to me.

GiantsAllDay
9695
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GiantsAllDay 03/12/13 - 11:32 am
0
1
Nevada doesn't have an income

Nevada doesn't have an income tax either. Then again, there's also no Belagio in downtown Augusta.

Darby
26070
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Darby 03/12/13 - 01:20 pm
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" there's also no Belagio....

in downtown Augusta."

.
We do have an Azziz... does that help?

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