Friendly tax bill

The Georgia House recently passed one of the most business-friendly bills in years by the lopsided margin of 169-2.

The measure, which phases out the horrendously complicated formula the state now uses to assess corporate taxes, would be a windfall for many firms, large and small. Under current law, Georgia corporations are taxed based on sales, number of employees and value of assets. The legislation would simplify all that and base the tax only on the firm's Georgia sales.

The House bill drew strong bipartisan support because, as Rep. Larry O'Neal, R-Warner Robins, chairman of the tax-writing House Ways and Means Committee told the Associated Press, it fixes a system that forces corporations to pay higher taxes for boosting the number of jobs and investments. That's a terrible tax policy for a state that seeks to encourage the development of more jobs and more investments.

Over the next decade, it's estimated Georgia firms will save over $970 million, yet the state's finances won't take such a hit. The loss, says O'Neal, would be offset in part by payroll growth, which the state auditor projects will be $696 million over the 10-year period.

Another provision of the proposed law should produce nearly $505 million for the state over the next 10 years, says O'Neal, by closing a loophole that allows corporations to shift income out of state to avoid state taxes. Over that time, the legislation could rake in $250 million more than the state otherwise would raise, says O'Neal.

In short, if O'Neal and his House colleagues are right, this is a measure that cuts taxes while increasing state revenues. You can't beat a deal like that.

The change is long overdue.