Monday, March 22, 2010

Less property tax, more sales tax?

The Atlanta Journal-Constitution’s Jim Galloway predicts that state leaders are trying to engineer a shift away from property taxes toward a system that relies more heavily on sales taxes. Here’s an excerpt from Galloway’s “Political Insider” article:

Senate Majority Leader Chip Rogers (R-Woodstock) gave strong hints of how Georgia’s tax burden is likely to shift. “We have a broken property tax system that’s a relic of a 19th-century agrarian economy,” he said. Rogers thinks the state’s income tax is too closely tied to unemployment to be reliable. He and other Republicans have been eager to dump the corporate income tax for years.

Which leaves an obvious target. “We have a sales tax system that exempts more products and services than it actually taxes,” Rogers said.

And that brings us back to 78-year-old Zell Miller, whom the lawmakers want to join Perdue [see my post about the proposed tax study commission--RM] in the tax rewrite. Why?

Because Miller knows the state budget and is not tied up in a political campaign, said House Majority Leader Jerry Keen (R-St. Simons Island). But Keen was being disingenuous.

The Capitol’s GOP leadership wants Miller for two reasons. First, among Republicans, the former governor and senator is a living saint. Secondly, Miller is an essential part of Georgia’s tax history.

Fourteen years ago, Miller pushed through the sales tax exemption on food. A sales tax on food is the kind of reliable revenue stream that Wall Street respects. Taxes on real estate are vulnerable to bubbles. People without jobs don’t pay income taxes. But everyone has to eat.

And if Republicans want to reinstate the sales tax on food, it would be nice to have an endorsement from the man who lifted it.

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