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AJC.com > Legislature > Blog > Archives > 2007 > March > 26
Monday, March 26, 2007
House will put off action on tax proposals
The Atlanta Journal-Constitution
Georgia’s House Republican leaders announced today they are putting off decisions on several major tax cut proposals until next year, including Gov. Sonny Perdue’s campaign promise to cut taxes on retirement income for the elderly.
They say they want to study those proposals — along with proposals to increase taxes for transportation projects and one to eliminate the car tag tax — over the summer and fall and then consider “major tax reform” legislation during their next 40-day session starting in January.
“The House has invested a tremendous amount of energy and time behind the scenes to come up with comprehensive tax reform,” House Majority Leader Jerry Keen (R-St. Simons Island) told reporters this afternoon. “Before we move with any major new tax proposals or credits — anything that is major — we feel like the prudent thing to do is wait.”
“When we come back in January,” Keen added, “you are going to see for consideration a major tax reform proposition out of the House that will really give you something to talk about.”
House Speaker Glenn Richardson (R-Hiram) recently started working with a pair of consultants on overhauling Georgia’s tax system: Arthur B. Laffer, an economist and former adviser to President Reagan, and Donna Arduin, a former fiscal advisor to Gov. Arnold Schwarzenegger.
Among the ideas they have discussed is a proposal to wipe out property taxes across the state in favor of a 5.75 percent flat income tax and a 5.75 percent sales tax. Right now, Georgians essentially pay a 6 percent income tax and 4 percent sales tax, along with local property taxes.
“We will probably be introducing a bill — which clearly will be designed to be used next year and to be talked about this summer as the mechanism to do this — probably right toward the end of the session,” Richardson told reporters this month. “I never planned to vote on it this year. I want to put the bill out there. I’m going to study it, have hearings on it, have input.”
Richardson also said he doesn’t anticipate the Legislature dealing with several proposals to increase taxes for transportation projects this year.
“I’m not going to muddy the waters right now on the tax discussion transportation,” Richardson said. “We may muddy it altogether but not separately.”
During his reelection campaign last year, Perdue promised to eliminate the state income tax on retirement income for upper-income Georgians older than 65. Seniors who work past 65 would continue to pay state income taxes on the wages they earn. However, any income from investments and 401(k)s would not be taxed under Perdue’s plan.
“There is still plenty of time left and the governor believes this is more than a campaign promise to be kept: it is the right thing for the people of Georgia and we’re going to keep working for it,” Perdue spokesman Dan McLagan said.
House Speaker Pro Tem Mark Burkhalter (R-Alpharetta), meanwhile, is proposing to eliminate the car tag tax, a measure that could save taxpayers $600 million annually when fully phased in. His proposal will also wait until next year, Keen said.
“It is a top priority of mine,” said Burkhalter, who joined Keen at the news conference. “And I will do everything I can to make it a priority of the House as we study the [tax] system.”
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