Another Southern state not named Georgia looks to ditch the income tax
Another day, another Republican governor making a bold proposal on an issue Georgia lawmakers have been wrestling with. From the Times-Picayune in New Orleans:
Gov. Bobby Jindal is proposing to eliminate Louisiana’s income and corporate taxes and pay for those cuts with increased sales taxes, the governor’s office confirmed Thursday. The governor’s office has not yet provided the details of the plan.
“The bottom line is that for too long, Louisiana’s workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity,” Jindal said in a statement released by his office. “It’s time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs.”
Jindal said the plan would be revenue-neutral and that the goal would be to keep sales taxes “as low and flat as possible.”
Another Louisiana newspaper, the Monroe News-Star, reports the state’s sales tax could rise as high as 7 percent from its current level of 4 percent. Louisiana has three income-tax brackets, with married couples paying 2 percent on income up to $25,000, 4 percent between $25,000 and $100,000, and 6 percent on income above that.
Georgia — where couples pay 6 percent on any income above just $10,000 — has taken tentative steps down this road before, although never to the point of eliminating the income tax completely. Former Speaker Glenn Richardson in 2007 proposed repealing all ad valorem taxes and broadening the sales tax to cover goods and services (the latter are not taxed today) at the 4 percent rate — his so-called GREAT Plan. But that only included lowering the top income-tax rate from 6 percent to 4 percent, not zero. More recently, a commission appointed in 2010 to study comprehensive tax reform came back with a plan to lower the income-tax rate to no higher than 4 percent and as low as 3 percent, which probably would be low enough to boost Georgia’s competitiveness while keeping our tax base diversified (income, sales, property, etc.).
As you may recall, the latter plan was stalled in the Legislature in 2011 and last year resulted in a tax bill that was advertised as “comprehensive” but in fact merely tweaked some corporate tax breaks and granted a number of long-time wishes of certain industries (e.g., auto dealers). I’ve heard no one suggest that tax reform will come anywhere near this year’s legislative session agenda.
Meanwhile, Louisiana is pressing forward in the direction taken by Florida, Tennessee and Texas — the kind of states with which Georgia competes for jobs and workers. In North Carolina, another of our peer states, new Gov. Pat McCrory has also pledged to pursue tax changes that include lower income-tax rates for individuals and businesses.
All of which would seem to leave Georgia falling behind.
– By Kyle Wingfield
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Visitor Agreement | Privacy Statement
© 2013 The Atlanta Journal-Constitution
217 comments Add your comment
Aesop's Fables and other Lib Economic Theories
January 11th, 2013
12:26 pm
Pay dirt: West Texas oil boom is ‘like Christmas morning’
Flock to area causes housing shortage
Posted: December 6, 2012 – 11:41pm
Aesop's Fables and other Lib Economic Theories
January 11th, 2013
12:29 pm
Posted on November 13, 2012 at 7:44 AM
From loaded trucks flooding roads to hiring signs posted on Interstate 20, the massive West Texas oil boom is driving the economy out of a long depression.
Barry Obama, community organizer
January 11th, 2013
12:46 pm
How about a national sales tax? I’ve got some groovy social programs I want to implement.
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
12:52 pm
Yeah, most wealthy people I know don’t spend most of their disposable income – they invest it so it will continue to earn money.
Ain’t no sales tax on socking it away.
You don’t like the Big Mac example, then use the family of 4 that cooks their dinner. They family that is better off makes 5 times what the poor family makes so are they going to spend 5x as much to prepare their breakfast, lunch and dinner 24×7x365? Not very likely.
An apple costs me just as much as it costs you folks. Hamburger Helper costs me the same as it costs you.
TiredOfIt
January 11th, 2013
12:55 pm
The rich will never go for a true flat tax or the mis-named fair tax.
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
12:57 pm
Increase the tax on ammunition by 50,000%.
Decrease the tax on guns to 0%
You can have all the guns, high capacity clips, and assault rifles you want! You just can’t afford t buy ammo.
mwuahahahahahaha. Ohhh, it’s coming
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
12:59 pm
If you can’t afford bullets, just throw the gun at your enemy. Those little metal pistols can hurt…..trust me.
Lil' Barry Bailout - OBAMAPHONE!!!
January 11th, 2013
12:59 pm
Ain’t no sales tax on socking it away.
———-
No, but savings are used to finance job creation, investments in plants and equipment, and other activities that do generate more sales tax revenue.
Lil' Barry Bailout - OBAMAPHONE!!!
January 11th, 2013
1:01 pm
You just can’t afford t buy ammo.
———–
I’m sure the black market would fill the need just fine.
MarkV
January 11th, 2013
1:05 pm
There is a big difference between replacing state income tax with sales tax, and doing the same with the federal income tax. It stems mainly from the amount of needed revenues. On the state level, the regressive nature of the sales tax is tolerable, which is not the case for the much higher federal taxes.
—————–
Dusty,
You might check the end of the yesterday’s blog. No compulsion, but getting off the subject might be acceptable there.
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
1:07 pm
Phil Gingrey on Todd Akin:
“… a woman’s body has a way of shutting down so the pregnancy would not occur. He’s partly right on that.”
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
1:08 pm
We just can’t take you Cons outside on days when the press people are around…
southpaw
January 11th, 2013
1:09 pm
Finn wants only the rich to be able to defend themselves.
Georgia
January 11th, 2013
1:12 pm
Wait a minute. Are some of the contributors to this blog’s comment board employees of the AJC, and actually working in the same building as JayKyle?
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
1:15 pm
Funniest line of the day is Finn trying to make us believe he knows rich people.
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
1:21 pm
Finn wants only the rich to be able to defend themselves.
Yeah, well, no one is going to be stealing from your trailer, Southpaw. So, you really don’t have much to defend.
Jefferson
January 11th, 2013
1:25 pm
Tax burden shift is what that is, the fair way is a progressive income tax. One day it will be like 1917 in Russia if you keep making more poor people.
teacher
January 11th, 2013
1:26 pm
ever been to Oregon. 3 or 4 % flat income tax and no sales tax its weird to pay 9.99 for something.
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
1:27 pm
I know dirt poor rednecks, too, Tiberius.
Or, perhaps you don’t consider us friends?
Centrist
January 11th, 2013
1:55 pm
Left unsaid in the blog and by State representatives is that there is a large untaxed underground economy, leaving honest taxpayers paying the bill. Non reporting and under reporting of income, complicated deductions (some bogus), and interpretations of accounting rules has made the income tax system untrustworthy – leading to more people justifying cutting corners.
A consumption tax is simpler, easier to avoid fraud, fairer, and captures the underground economy. But it doesn’t reward nearly as many special interest political contributors, friends, family and cronies which is the primary reason we are stuck with the mammoth income tax system mess we have.
Good to see some states are considering moving to match Texas, Florida, Tennessee, Alaska, Nevada, South Dakota, New Hampshire, Washington, and Wyoming.
Barry Obama, community organizer
January 11th, 2013
2:03 pm
“Tax burden shift is what that is, the fair way is a progressive income tax. One day it will be like 1917 in Russia if you keep making more poor people.” – Jefferson
The more poor people that can be created through my policies means perpetual power for my party. There won’t be too many left to vote Republican.
JamVet
January 11th, 2013
2:12 pm
There won’t be too many left to vote Republican.
Love it!!
You’re doing a heckuva job, connies….
yuzeyurbrane
January 11th, 2013
2:14 pm
Show me the evidence that low corporate taxation has led to economic growth in Georgia. This is just a continued reverse Robin Hood program of stealing from the poor and middle class to make the rich even richer.
Kyle Wingfield
January 11th, 2013
2:28 pm
yuze @ 2:14: What “low corporate taxation”? In its latest State Business Tax Climate Index, the Tax Foundation rates Georgia 34th.
Kyle Wingfield
January 11th, 2013
2:28 pm
That’s on a scale in which 1 represents low taxation and 50 high taxation.
d
January 11th, 2013
2:30 pm
Despite the fact that sales taxes are very regressive taxes (I buy a loaf of bread and minimum wage worker buys a loaf of bread, the sales tax takes a bigger hit for the minimum wage worker) I think I would support this idea at a state level. It would probably be a boon to state coffers as people would likely spend the extra money from their paychecks in state – and heck, with the world’s busiest airport here in Georgia, we see people changing planes all the time grabbing a cup of coffee at Starbucks. It’d be nice to have their dollars here in Georgia so we could pay our teachers what they deserve.
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
2:31 pm
yuz, at some pint you’re going to have to actually start using your brain and understand that one-dimensional thinking (that being that tax rates alone drive economic growth) just doesn’t work with an economy.
It’s lack of thinking like yours that has gotten this country into the mess it is in right now, with no hope of ever escaping from it.
Lil' Barry Bailout - OBAMAPHONE!!!
January 11th, 2013
2:31 pm
Switching to a sales tax would ensure the moocher class pays their fair share instead of ducking taxation by not working for a living.
Laurie
January 11th, 2013
2:33 pm
Income tax is the most fair way to collect money, so it’s not suprising that southern states want to do away with it. Texas state sales tax is 8.75%. If Ga follows suit, consumers will be asked to pay as much as 11.75% in tax given the various local options enacted over the years. Given our current laws regarding sales tax collection across state lines, the smart people will shop more online to get around the high tax. But, you know who doesn’t have to worry about policing internet sales and the effect on state economy? Oregon. They have no sales tax, thus bypassng that whole issue.
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
2:34 pm
Uh, d?
Most of your teacher’s salaries are paid for at the LOCAL level, not through state funding.
Lil' Barry Bailout - OBAMAPHONE!!!
January 11th, 2013
2:35 pm
Show me the evidence that high personal taxation has led to economic growth in the United States.
Taxes don’t lead to economic growth. They retard it.
teacher
January 11th, 2013
2:37 pm
tiberius,
henry co teacher salary 48000
45000 from state
3000 from henry
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
2:38 pm
“the smart people will shop more online to get around the high tax.”
Really, Laurie?
They’re gonna buy their lumber, cars, food, etc over the Internet?
Day-to-day stuff is bought LOCALLY. Always has been; always will be.
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
2:41 pm
teacher.
Nope.
Funding goes from local property taxes to the state first, then is doled back out to each county (a grossly inefficient and ineffective way to do so, but it allows the state to redistribute income from wealthier counties to poorer ones).
Nice try, though. Next time learn how your taxes are collected and distributed, OK?
JamVet
January 11th, 2013
2:44 pm
The Tax Foundation???
An EXTREMELY suspect group.
My goodness, look at their present and past board of directors.
And where do they get their dough? ExxonMobi, andthe Koch Family Foundations among other corporate and neocon interests.
No sale…
teacher
January 11th, 2013
2:51 pm
tib,
i don’t think so..only about .25 of a mill goes to the state to get redirected to other counties.
kyle do you know???
Kyle Wingfield
January 11th, 2013
2:52 pm
JamVet @ 2:44: Would you care to examine how they put together their index and criticize that, or just slander them based on who some of their past board members are?
Don’t bother. I know the answer.
Kyle Wingfield
January 11th, 2013
2:54 pm
Tiberius @ 2:41: That’s not right. The redistribution you’re talking about comes from state funds. Local governments also levy their own taxes that they keep for themselves. This was the premise of the lawsuit that led to the original charter schools commission’s being overturned: The locals didn’t like receiving less in state funding based on what they did with their local funding, over which the state otherwise had no control.
Kyle Wingfield
January 11th, 2013
2:56 pm
In all, roughly half of all education spending in Georgia is made by local governments with locally levied and collected taxes (primarily property taxes).
JamVet
January 11th, 2013
3:01 pm
My, my, my, a tad touchy aren’t we, Mr Wingfield?
Saying they are suspect is now considered slandering them.
But since you have all the answers I’ll let you explain why their data is infallible.
teacher
January 11th, 2013
3:01 pm
kyle,
about half the funding for schools come from local funding for day to day stuff…heat, gas for busses, building upkeep.
salaries are about 90% on the state. right?????
Kyle Wingfield
January 11th, 2013
3:02 pm
JamVet @ 3:01: I never said their data are infallible, but you sure suggested their data are not trustworthy.
So, please, by all means, explain why the data are untrustworthy.
Kyle Wingfield
January 11th, 2013
3:03 pm
teacher @ 3:01: That’s about right. I don’t know off the top of my head if 90% is exactly correct, but it’s in that vicinity. Definitely a majority.
Cheesy Grits is gone but not forgotten
January 11th, 2013
3:04 pm
This shifts alot of the tax burden from welathy business on to the backs on the poor so of course Republicans will be all for it
In other news….
Rep. Phil Gingrey, R-Ga., a former obstetrician-gynecologist, said at a town hall meeting that Akin was “partly right” in his controversial suggestion, which was widely cited as a factor in his loss to Missouri Sen. Claire McCaskill, D, this past November.
http://firstread.nbcnews.com/_news/2013/01/11/16465141-gop-congressman-akins-rape-comments-were-partly-right?lite
Once again Georgia Republicans make us the laughingstock of the nation.
Centrist
January 11th, 2013
3:05 pm
Many of the “poor” make a lot of unreported money – avoid tax and qualify for more subsidies, grants, programs.
The regressive issue can easily be overcome by not taxing BASIC necessities (true groceries, minimal lodging, minimal utilities). Of course, the special interests all line up to get included in what the term “basic” means. We currently tax a flat 6% above $10K of income which is essentially the same as excluding basic necessities.
Cheesy Grits is gone but not forgotten
January 11th, 2013
3:06 pm
US economist Paul Krugman has characterised the Tax Foundation as “not a reliable source” while criticizing a report by the Tax Foundation comparing corporate tax rates in the United States to those in other countries.[43] Krugman has also accused the Tax Foundation of “deliberate fraud” in connection with a report it issued concerning the American Jobs Act
http://en.wikipedia.org/wiki/Tax_Foundation
Grain of salt.
Aesop's Fables and other Lib Economic Theories
January 11th, 2013
3:09 pm
Wait a minute. Are some of the contributors to this blog’s comment board employees of the AJC, and actually working in the same building as JayKyle?
Ur correct! Would you like their names?
teacher
January 11th, 2013
3:09 pm
thanks kyle,
______________________________
tib,
dont worry i am not the kind of person that says i told you so
Finn McCool (The System isn't Broken; It's Fixed)
January 11th, 2013
3:10 pm
Yeah, and how many smart people are buying lumber, Tiberius?
Kyle Wingfield
January 11th, 2013
3:10 pm
Former NYT public editor Daniel Okrent, in the final column he wrote in that job (May 2005): Krugman has “the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.”
So, take Cheesy’s grain of salt with a shaker of salt.