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
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217 comments Add your comment
josef
January 11th, 2013
4:59 pm
CHEESY
I am a public school employee. For any number of reasons, they have fallen into disrepute and are failing our future miserably. Just my opinion from the front lines, but no small part of that failure has been the lack of community involvement. Centralization and mandated curricula oriented to producing an assembly line product is not the way to go. If charter schools can make even a small dent into that “control of the curriculum” then, so be it. Anything to put the fear of G-d into those who have for so long now been above and beyond reproach.
Some charter schools will fail miserably and some will excel spectacularly. It all depends on what it is that those going into it design. No one will be “forced” to attend a charter from what I have seen so far.
I don’t think that charters are “the” answer, but they are an option.
The school where I work, works fine, but that is because we have a staff and a community who are highly involved.
Georgia
January 11th, 2013
4:59 pm
Are there employees of the AJC on the blog now?
Tiberius - pulling the tail of the left AND right when needed
January 11th, 2013
5:00 pm
“Most people understand that your money is your voice in politics.”
Which is why a national sales tax, with no loopholes or deductions, is the best way to go. Takes all the money out of the vote.
d
January 11th, 2013
5:02 pm
Check any high school economics textbook and you can learn the difference between progressive, regressive, and proportional taxes. We see all three in use. Progressive – our individual income tax. The more you earn, the higher percent you pay…. Unlike most people want to say, it is marginal tax rates, not just multiply your salary by x%. So the people who saw taxes increase due to the fiscal cliff negotiations are only paying higher taxes on income over $450k, so the first $450k is taxed at the same rate as 2012.
Regressive – the higher your income the less a tax hurts you. Take my sales tax on bread issue from earlier today. If the tax is 5%, on a $20 purchase, that $1 in tax is a larger portion of a minimum wage worker’s salary than it is of mine, so it hurts that person more.
Proportional – multiply your salary by the tax rate – just like the medicare tax. If the tax is 2%, you earn $200,000, write the check for $4,000. If you earn $50,000, write the check for $1,000.
As far as who pays my salary as a teacher, I receive a $0 local supplement from DeKalb County this year, so my entire salary is the state portion.
Michael H. Smith
January 11th, 2013
5:02 pm
I’d say we agree more than disagree @@.
Anyway, time for me to go. Latter all.
Dusty
January 11th, 2013
5:03 pm
MarkV
Thanks for the review of Downton Abbey on the last blog. That was very interesting. I’ve got to get my eyes on that one. You outlined it quite well. Sounds like a great ;performance.
Goodnight . Closing time draws near…
d
January 11th, 2013
5:03 pm
Oh, and as long as we are mentioning charters, if they are the salvation, why do we continue to put more and more regulations on traditional schools? I truly believe all schools should be charter.
MarkV
January 11th, 2013
5:07 pm
Dusty @ 5:03 pm
You are welcome. G’nite
@@
January 11th, 2013
5:10 pm
Just thought I give you my reasoning before the fact.
Why do you keep bringing up your “problem with a so-called ‘Fair Tax’…” when I’m talkin’ Flat Tax?
What we have here is a failure to communicate. You’re shakin’ it, but I’m not seein’ the IT of which you speak so highly.
(ISH)
Aesop's Fables and other Lib Economic Theories
January 11th, 2013
5:14 pm
Are there employees of the AJC on the blog now?
It looks like finn mcfool went home for the day. I think cheesy is still here though.
getalife
January 11th, 2013
5:26 pm
kenneth the page jindal is a joke and we want him gone.
Kyle Wingfield
January 11th, 2013
5:34 pm
Immediate commenting is off until Monday morning. A new post will be upstairs around 6 p.m., and I’ll push through some comments on it during the weekend as I’m able.
Go Falcons!
Hillbilly D
January 11th, 2013
5:59 pm
A couple of points….
I don’t know the figures but Louisiana does get some money from oil and gas, so that helps keep their tax rate lower.
The sales tax is the most regressive of all taxes, so I’m ag’in it.
indigo
January 11th, 2013
6:19 pm
Aesop – 4:59
No, we don’t.
All we have is copies of copies.
However, fundamentalists, by “divine inspiration” feel they actually know who did.
the red herring
January 11th, 2013
8:08 pm
i would vote for higher state sales tax and eliminate state income tax in a heart beat. we would get some of the money we are missing from illegals, from people passing thru ga. , tourists visiting ga., etc. A wonderful idea and eliminates the need for excessive laws/rules/regs to handle state income tax— simply pay the sales tax and be done with it. hire 1/4 of the people enforcing state income tax laws to increase enforcement on businesses not reporting their sales tax correctly. a great idea.
Reality
January 11th, 2013
9:08 pm
@d -
Thank you for clearing up the definitions. I didn’t want to go there. However, I would bet that the con repubs on here (to include Michael H. Smith and others) will still refuse to admit the truth. They love to live in their bubble of lies and untruths until FOX news gives them another fable to believe in.
jorae
January 13th, 2013
10:33 am
The game is so easy to identify. Less taxes, we don’t have the money, and out goes what is the social contract. The hate and meanness should be embarrassing to normal folks. Ayn Rand… hero, to the ignorant who think things will be just fine…for people to be treated like animals.