Roy Barnes pitches tax breaks for job-creators; Nathan Deal says defer taxes for new start-ups

From the Associated Press:

Savannah, Ga. — Democrat Roy Barnes said Friday he wants $300 million in new tax breaks for businesses that create jobs in Georgia and vowed he would deny state contracts to firms that send jobs overseas if he’s elected governor.

“It’s time we get serious that it’s our people that need jobs,” Barnes told an economic development conference in Savannah.

Nathan Deal, Barnes’ Republican rival in the race, said he’s largely waiting on a tax commission formed by the Legislature to study and suggest revisions to the state’s tax code. Its recommendations are due in January after the new governor takes office.

But Deal told the same group he’s pitched an idea to defer taxes owed by small businesses in their startup years when they’re most vulnerable to failure.

“They fail generally during the first three to five years, and taxes just become a burden on them,” Deal said. “If they fail, they don’t create any jobs and they don’t pay any taxes.”

The tax breaks Barnes is proposing would come as a two-year suspension of state capital gains taxes as well as payroll taxes on new jobs.

Barnes said he would require the capital gains savings to be spent on new investment such as business startups and expansion or land acquisitions in Georgia. The idea, he said, is to give investors a limited window to inject tax-free capital into the state’s struggling economy.

Barnes estimated the tax breaks would cost the state $300 million. He said he’d work to make up the lost revenue, in part, by rolling back sales tax exemptions and other tax breaks that don’t lead to job creation.

Barnes also pledged to give Georgia employers preference in winning state business — particularly by refusing to award contracts to companies that send jobs to other countries.

“You outsource jobs away from the United States, then you shouldn’t be eligible to bid on state contracts,” Barnes said. “They shouldn’t be sending jobs overseas. I don’t care how large they are.”

Deal, who addressed the Georgia Economic Developers Association conference after Barnes, said a blanket refusal by the state to do business with outsourcing companies might run afoul of some trade agreements Georgia has with other countries.

However, Deal said he agrees with the idea in principle.

“To the point that you can say we’re going to nationalize our job base, I certainly think that’s an appropriate thing to do” he said.

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91 comments Add your comment

Retired Soldier

September 24th, 2010
3:56 pm

Let see if I undersatand Barnes correctly. When he is governor the state of Ga wants to buy 1000 widgets. Two bids are received the first one from a Ga firm offering the widgets at a price of $1000.00 per widget or one million dollars.

The second bid is from India at a price of $100.00 per widget or $100,000. Using the Barnes doctrine tax payers pay an extra 900 thousand. Way to go Roy!

findog

September 24th, 2010
4:02 pm

RS I sure hope you weren’t in the intelligence branch
If we give you a contract for 1000 widget made here for $1k
And then you SEND the widget factory to India to make them for $100
You are not going to get another contract

Why don’t we outsource the military to Cuba where we could save a bundle of our tax dollars

Aquagirl

September 24th, 2010
4:05 pm

As I understand it, the second firm would be in Georgia also, but with the employees in India. Newsflash: We won’t have money to buy widgets at all if we keep sending money overseas. Where do you think the tax dollars come from in the first place? Deadbeats like Deal?

Lets not kickback Roy into the Governor's office

September 24th, 2010
4:06 pm

Of course Barnes want the state to use capital gains to acquire land if he is governor. Barnes will buy land at inflated values from his developer friends. Paid his campaign contributor $10.4 million. DOT had just appraised the land at $3.7 million. That is $6.7 million in the pocket of one campaign contributor in one instance alone. No Roy you are not allowed to pocket the capital gains savings. Can you say kickback?

Retired Soldier

September 24th, 2010
4:09 pm

Findog-

Nope, I worked for a living.

rightofcenter

September 24th, 2010
4:10 pm

King Rat is going around the state saying that the bad ole Republicans decimated the state budget by instituting a bunch of tax exemptions. Now he says, “but wait – I’ve got a better one.” What a clown.

Retired Soldier

September 24th, 2010
4:15 pm

Fin & AQ-

The purpose of my post is when a politican offers a “cookie” cutter solution, it’s usually worth about the same as a cup of coffee.

I made the same point to Karen Handle before the primary. She proposed cutting every agency of state government 10%. That takes no brain work at all. I would be all for reducing state governement 10%, but you study all agencies and cut say 12% here, 8% there etc.

Don’t give us cookie cutter solutions.

rod

September 24th, 2010
4:16 pm

the reason king bubba roy can only run deal ethics ads is because when he offers a program such as this one he shows his ignorance and helps us to remember his dismal job as the man before. He should join Jimmy 20% inflation / gas rationing / 18% mortgage rates Carter on a comic book tour.

When Hell Freezes Over

September 24th, 2010
4:22 pm

I read through the list of campaign money contributors to Barnes last night. It was pretty interesting reading – if you know who the players are.

Aquagirl

September 24th, 2010
4:24 pm

Keeping jobs here is a “cookie cutter” solution, and a proposal to suspend taxes on start-ups isn’t? Mmmmmkay. I guess when Google launches a spin-off here they can avoid taxes. How does Deal propose to define what’s a start-up?

Most media stories are going to be thin on details, that doesn’t mean it’s a flat cookie-cutter proposal. If every story had the entire proposed bill/tax code the website would crash.

Lets not kickback Roy into the Governor's office

September 24th, 2010
4:25 pm

Roy could have given Blago a lesson or series of lessons on how not to get caught.

Retired Soldier

September 24th, 2010
4:29 pm

AQ-

Come on lady, I didn’t say keeping jobs here is cookie cutter. The method of keeping jobs here Barnes proposed is cookie cutter. I’m all for keeping money in GA, but if I’m as dumb as findog thinks I am and can blow a hole in Roy’s proposal in 30 seconds, think what a smart guy could do.

Retired Soldier

September 24th, 2010
4:30 pm

or gal (wink)

Hey Big Spender

September 24th, 2010
4:32 pm

A state inspector general’s report released in April 2003 showed that Barnes paid $6.7 million too much for a parcel of land owned by Jim Jacoby, a major Barnes contributor. (”$10 million in tolls for $3 million land – Inspector suggests Ga. 400 revenue misused,” AJC, 4-22-2003). The Inspector General called the purchase a “questionable use of state funds without documented due diligence.” A Georgia DOT appraisal three months before the purchase placed the value of the land at $3.7 million.

http://gacandidates.blogspot.com/2010/09/deal-stakes-out-differences-on-ga-400.html

Aquagirl

September 24th, 2010
4:36 pm

Um, RS, I missed the part where you did the blowing. I think you were daydreaming. I’m sure that happens a lot.

The idea a contract will only have two bidders, one of which is $900,000 cheaper is purely from your imagination. Please indicate where in the real world you think this might happen.

Aquagirl

September 24th, 2010
4:40 pm

Oh, and RS, I think my job of blowing Deal’s was at least equal to your effort of blowing Roy’s.

There’s no way you’ll argue this point, lol!

Retired Soldier

September 24th, 2010
4:45 pm

AQ-

I have been bested by a better…er…never mind. A better intelligent person. Excuse me…need a glass of ice water here.

In all seriousness I could give you examples from personal experience but to do so on here would be a bit to “revealing”.

Publius

September 24th, 2010
5:00 pm

Nathan, what “trade agreements with other countries?” I believe the state is prohibited from negotiating agreements with foreign governments. Kind of the whole reason they wrote the Constitution in 1787.

Corrupt Deal Real Steal

September 24th, 2010
5:06 pm

Deal is right there with Jesse Jackson, Jr. (D-IL),Charles B. Rangel (D-NY), & Maxine Waters (D-CA). They say they are innocent TOO.

15 Most Corrupt Congressmen..

•Rep. Nathan Deal (R-GA)
•Rep. Vern Buchanan (R-FL)
•Sen. Roland Burris (D-IL)
•Rep. Ken Calvert (R-CA)
•Sen. John Ensign (R-NV)
•Rep. Jesse Jackson, Jr. (D-IL)
•Rep. Jerry Lewis (R-CA)
•Sen. Mitch McConnell (R-KY)
•Rep. Alan B. Mollohan (D-WV)
•Rep. John P. Murtha (D-PA)
•Rep. Charles B. Rangel (D-NY)
•Rep. Laura Richardson (D-CA)
•Rep. Pete Visclosky (D-IN)
•Rep. Maxine Waters (D-CA)
•Rep. Don Young (R-AK)

Tuckerman

September 24th, 2010
5:08 pm

This alone should disqualify him to be governor. Georgia Has No Foreign Trade Agreements, Mr. Deal!

“Deal, who addressed the Georgia Economic Developers Association conference after Barnes, said a blanket refusal by the state to do business with outsourcing companies might run afoul of some trade agreements Georgia has with other countries.”

True republican

September 24th, 2010
5:08 pm

RS, your arguing with a wall. You not going to get anywhere. She does not understand capitalism. In the world of international economics this is called the law of comparative advantage. When one country can make a widget for much lower than another it is to the advantage of BOTH countries to work out a trade agreement. It makes no sense for Georgia to purchase a product at inflated prices domestically to add artificial jobs to undeserving companies. The goal would be to increase our companies efficiencies and lower manufacturing cost to compete. The problem you are going to run into with your girl AQ is the best way to do this is to axe unions in this country. I am guessing she is an SEIU supporter.

Retired Soldier

September 24th, 2010
5:12 pm

True-

Thanks for that lesson. You said he better than I could. In simple terms if I wanted to buy a ford F150, both trucks are exactly the same. One costs less than the other, which should I buy? Seems like a no brainer to me.

Aquagirl

September 24th, 2010
5:17 pm

RS, yeah, this is certainly in the category of “too much information.” I can be quite underhanded when trying to win an argument, heh.

True Republican, off of the top of my head I don’t even know what SEIU stands for, so I can’t really tell you whether I support them or not. I’m not all for naked capitalism run amuck, or unions (which are based in fear and intimidation) either.

True republican

September 24th, 2010
5:18 pm

Georgia works out deals with a lot of countries to get them to locate facilities here. They may not be written formal agreemens but what do you think Germany is going to think when they find out they have no chance at any contracts in the state. Not sure if you have noticed but germany has tons of companies locoed here that employ thousands of georgians. Elringklinger, siemens, ZF industries just to name a few. ZF industries is about to expand another facility generating many new jobs manufacturing wind turbines for windmills. You don’t want to bite the hand that feeds you.
I am amazed at how ignorant the people on AJC blogs are about how basic business operates.

True republican

September 24th, 2010
5:24 pm

Service Employees international union. The head of this has visited the white house more than any other individual since Obama has become president.

Really Red

September 24th, 2010
5:28 pm

I love em crazy. The crazier the better. Create chaos!

findog

September 24th, 2010
5:36 pm

RS/AQ
Here is an example
Avery used to print labels at a plant in Flowery Branch
They despoiled the land, it is on the EPD brown field list, used to turn mud creek green and blue when the cleaned out the printing drums
Well then Avery packed up all the equipment and shipped it to Mexico five or six years ago
Flowery Branch now has some prime industrial property no one will touch
Should Georgia be buying office products and labels from Avery now?

Aquagirl

September 24th, 2010
5:37 pm

From the looks of it, a large part of the SEIU is (are?) health care workers. No wonder health care costs are going through the roof.

Unions were good at one time. They’ve outlived their usefulness though. I’m sure Obama owes them something, just like Bush owed the bankers, or Reagan owed the defense industry. Business as usual in the U.S. of A.

findog

September 24th, 2010
5:51 pm

True Republican,
Why do we buy military equipment from vendors who piece out parts throughout the US to separate congressional districts?
There is no business logic in adding packaging, handling, and shipping to all those components
And then there is security
So if it works for the strong military folks why can’t it work for Georgia?

whiterabbit

September 24th, 2010
5:54 pm

Well its not quite as simple as some of you think. Although we may pay less for a service or contact outsourced to India or similar short term the potential cost on the back end to GA in terms of paying unemployment for individuals fired and the loss in sales tax is higher.

I think everyone of every party should be against globalization and especially using foreign labour/goods for contracts paid with tax dollars. If we don’t stop this most peoples income in GA will lower to the level of India or Mexico.

WAW

September 24th, 2010
6:04 pm

Nathan spoke of the one thing he knows. Start-ups usually fail within the first five years. Where did he learn that?

True: Just so happens that they are personal friends so frequent visits are to be expected. Not unlike hugging and kissing a Arab prince. my point!

Paddy O

September 24th, 2010
6:28 pm

True republican – you really this New World Order? The higher cost for the American company is most likely LABOR – Americans with good jobs, who turn around & buy other things made by Americans – it is what leads to a higher standard of living. What the federal government of the United States should do is erect trade barrier preventing 3rd world nations from dumping usually inferior product made by relative morons who have no concept of what their labor is really worth (as opposed to well educated & knowledgeable American citizens – Adam Smith). Therefore, the taxes collected from Georgians would be paid to a lot of Georgians who would then go around and spend that Georgia tax money with other Georgians in their various businesses, as opposed to the 1 to 4 Georgians (maybe) who have set up a corporate shell here in GA just to suck capital out the state/country, and most likely do not live here, and will spend a lot of the money they have just duped out of GA somewhere else. No wonder GA republicans pretty much suck.

Paddy O

September 24th, 2010
6:32 pm

True – this is comparative advantage you spoke of earlier, you boob. Labor costs are cheaper in the US than in Germany, where Germans are smarter than Americans at obtaining their true labor value. That is why they have factories here – plus, due to our large size and gigantic market, we are the target market for almost everything the world makes.

Paddy O

September 24th, 2010
6:33 pm

True – do you think all those firms are run by the German government? Is Germany that Communist now? Or are still dedicated to proving GA republican are profound idiots that can not even comply with their own principles?

Paddy O

September 24th, 2010
6:38 pm

PS: The reason they can not comply with their principles is because so many of them are RINOs. Was Deal not a former Democrat? What % of repubs in our state house are former dems? Listen, if you have the market where everybody wants to sell in, it makes no sense in doing anyone outside of that market a favor. By the way, regarding Avery – if their factory is now in Mexico, and another GA firm makes similar products here in GA, I would stop buying everything made by Avery in Mexico. Have their prices dropped?

hl

September 24th, 2010
7:00 pm

Seven percent of the working population belongs to unions. They are not the reason that GA’s unemployment rate is above 10%. I haven’t studied Barnes’ proposals but on the surface it sound reasonable. The next governor has to face the fact that GA is losing more jobs than the rest of the country and you can’t blame that on the recession or Obama. We are not keeping up. I am a strong believer in our Democracy and think that a middle class is important. When I see folks complaining about class warfare because they have to pay higher taxes and then complain when blue collar folks earn $50,000 it tells me what class warfare is. I don’t want to live in an oligarchy system. Capitalism and democracy is just fine as long as it has some tweeks.

When Hell Freezes Over

September 24th, 2010
7:05 pm

Corrupt Deal Real Steal:

Is the posting of the CREW list the sum total that you can contribute? It hardly takes brains to “cut and paste” the same material over and over again. Most of the people here, apparently unlike you, have enough intelligence to have memorized it by now with your daily repeated posting of this CREW list. Get a brain . . . and a life.

Red

September 24th, 2010
7:15 pm

Is this a Dem offering tax breaks to corporations? Isn’t that completely counter to their rhetoric? Roy, as a Dem you’re supposed to say you’ll tax the rich and give to the poor. Only evil Republicans give breaks to Big Business. Roy’s having an identity crisis.

I can see Russia from my house

September 24th, 2010
7:18 pm

Nathan, come on up here to Alaska and help me keep an eye out for the Russians. We’ll hunt some wolves, too.

You betcha!

When Hell Freezes Over

September 24th, 2010
7:26 pm

hl:

“I am a strong believer in our Democracy . . . ”

When did we become a democracy? No one informed me of that event. Do you know what date it was that this transformation took place?

When Hell Freezes Over

September 24th, 2010
7:41 pm

Red:

Barnes may be having an identity crisis . . . but I know who he is. I remember him from the first time around!

I Can See John Edwards From My House

September 24th, 2010
7:45 pm

John,

Sorry you didn’t make it to the Big Oval office–in spite of my endorsement. We trial lawyers have to stick together. Personally, I think you got a raw deal.

Called you this week when my schedule was freed up. I had to cancel the fundraiser with Bishop Eddie, you know. Just too hot to handle. I didn’t leave a VM but maybe you’ll have a chance to call me back.

BTW, tell Rielle I said hello. You’re a real piece of work–you know that John?

Warm Regards,

Roy

hl

September 24th, 2010
7:54 pm

When hell freezes over, You need to turn off Boortz. hahahahaha He seems to think an oligarchy is just fine. Thanks for the laugh though.

When Hell Freezes Over

September 24th, 2010
8:02 pm

hl:

You, of course, didn’t answer my question. What could I have expected? I don’t think you know. By the way, I haven’t listened to Boortz in a very long time, but apparently you do. Nice try, bush league.

professional skeptic

September 24th, 2010
8:13 pm

It just gets better and better. Ol’ Brother Nathan goes and hires hisself a shyster accountant to lift up the rug and run his hands up under the couch cushions, and… OH! Looky here! Another couple million dollars in assets we plumb forgot all about! As I live and breathe, it was right here all along! Well, ain’t that handy… a bunch of forgotten assets to balance out all that messy debt we overlooked!… AW HELL! It’s not quite enough… Nothin’ to worry about, Mr. Deal, lemme just tweak the “value” of somma these real estate holdings just a hair…. YEP! That’s it! NOW things are looking good! What’s that? My fee? Shoot, I wouldn’t dream of it. You go ahead and keep your cash, Mr. Deal… we’ll have plenty of time to talk about “compensation” once you get good and settled in at the Guv’ner’s mansion…

cs

September 24th, 2010
8:16 pm

More corporate welfare. Let them pay the same taxes we all have to.

King Roy

September 24th, 2010
8:55 pm

Good evening, my fellow Georgians,

On November 2, you will be asked to make a critical decision impacting you, your family and the entire State of Georgia. I ask that you choose wisely who is to rule your state for the next four years.

As most of you know, I honored you with my enlightened rule of Georgia for four years in the not too distant past. Most of you, for some unknown reason, chose to replace me after my first four years of rule. I come before you now to forgive you. The past will be forgotten as well as forgiven. I am here tonight to inform you that I will once again condescend to rule you ignorant rednecks again. Although unworthy of the honor I am prepared to bestow upon you, you will once again be blessed with my benevolent governing.

Unlike the Pope, I do not expect you to kiss my ring. I will allow you to kiss a portion of my anatomy that shall be indicated to you by my trusty manservant, Tom.

I wish to you, my admiring subjects, a pleasant evening. . .

When Hell Freezes Over

September 24th, 2010
9:16 pm

Yeah, right!

td

September 24th, 2010
9:49 pm

cs, It is called the fair tax. Everyone pays the same. Will you support it?

td

September 24th, 2010
9:57 pm

hl, Oligarchy-is a form of power structure in which power effectively rests with a small segment of society distinguished by royalty, wealth, family ties, or military control.

There were 13 people running for Governor and we the people had the chance to elect any of them. I do not think all any of them fit the above definition and know all of them surly do not so I do not think your claim fits.