The sudden movement of a House bill that would restore a four-cent sales tax on groceries, in return for a state income tax credit, has baffled many around the state Capitol.
But perhaps it shouldn’t. This is very much in keeping with the theme pushed by House Speaker Glenn Richardson only 12 months ago.
Richardson pushed for the abandonment of property taxes, in exchange for a shift toward a broader sales tax.
In 2009, we have the same object, just a different revenue stream: Increase the reach of the sales tax, and decrease dependence on the state income tax. It’s all about shifting the burden.
One senator watching things unfold, and not altogether happy about it, called H.B. 67 a variation on the Fair Tax — which is ever popular in GOP ranks.
The grocery tax measure is sponsored by state Rep. Chuck Sims (R-Ambrose), and passed the House Ways and Means Committee last week. Georgia residents who file income tax returns would be able to deduct either the taxes they paid on groceries, documented with receipts, or get a credit based on the number of dependents in their family.
Though he’s not saying much this session, the House speaker said several times last year that he was pitching the abandonment of the property tax because it didn’t sweep up all of society’s participants.
Illegal immigrants, for instance. Tourists. These same people, if their population were large enough, could provide a theoretical cushion by which the state — through a grocery sales tax hike and income tax refund — could increase its take. And Republicans could still declare the measure revenue neutral.
That cushion could be $250 million a year, Sims has said.
The irony is that House Republicans are fixin’ to get ready to consider an increase in the sales tax for groceries, but are ignoring a measure proposed by state Rep. Ron Stephens (R-Savannah). H.B. 39 would increase the state excise tax on cigarettes — one of the lowest in the nation — by a dollar.
“I’m perplexed,” Stephens said this morning. Even so, Stephens does sit on the House Ways and Means Committee, and he did vote for H.B. 67.
But one of the advocates for Stephens’ bill, the Georgia affiliate of the American Heart Association, is making a direct comparison between the grocery tax and the cigarette tax.
This is the e-mail message recently sent out by the AHA to supporters:
“Take a moment to tell your representative that raising the tax on cigarettes is a win-win for Georgia, and a tax on groceries is a bad move at a time when citizens can least afford an increase in their cost of living.”
At bottom, the grocery sales tax could have the same problem as all discussions of the Fair Tax, which would shift the nation away from a federal income tax in favor of a consumption tax. And the same problems encountered during the property tax debate initiated by the speaker.
Politically, voters don’t hear words like “rebate” or “refund” or “credit.” Or at this point, may not believe them. But they hear “sales tax increase” real good.
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