Perdue vetoes major tax cuts

ATLANTA --- Gov. Sonny Perdue vetoed a sweeping proposal Monday that would slash the state's capital gains tax in half over two years and give tax breaks to those who hire the unemployed because it was "unattainable" amid the recession.

The veto came as state officials reported that Georgia's tax collections during April plummeted 20.6 percent from the same month the year before -- or $362.1 million.

Still, Mr. Perdue signed a separate proposal to provide a tax credit of up to $1,800 on homes purchased during the next six months.

Mr. Perdue said he found that measure more palatable because it was a "strategic investment that strikes at the root of this economic downturn."

The measure Mr. Perdue vetoed would have doled out a $2,400 income tax credit to any business that hires someone who has been unemployed for at least four weeks. It also would have created a one-year "new business tax holiday" that waives the $100 filing fee for new business.

Supporters said the efforts were aimed at putting Georgians back to work as the state grapples with a high unemployment rate, which was 9.2 percent in March.

Critics said the capital gains cuts would rip an even greater hole in the state's budget -- and would benefit only the wealthiest Georgians. And budget analysts said Georgia would be hard-pressed to handle deeper cuts to the tax base amid a multibillion dollar deficit.

Mr. Perdue, for his part, said many of the measure's provisions would stimulate job growth. But he said "it has to be affordable, or it's not possible."

The decision drew instant condemnation from Republican leaders.

Senate Majority Leader Chip Rogers said he will continue to push the tax cuts and other "pro-growth policies."