State GOP lawmakers propose tax cuts

State House and Senate Republicans unveiled a package of tax credits and cuts Wednesday that they say will help create and maintain jobs across Georgia.

Included in the legislation, House Bills 481 and 482, is a $2,400 income tax credit for each unemployed person that businesses hire before July 2010 and keep on the job for at least 24 months.

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The biggest, long-term change would be a reduction and eventual elimination of the state’s 6 percent corporate income tax, beginning in 2012. In good years the tax brings in up to $1 billion in revenue. The state is only expected to reap $600 million from the tax in fiscal 2010, which begins July 1.

The package would have limited impact on the state budget in the upcoming year because the tax breaks won’t be paid out immediately or because the money is not coming from the state general fund. Lawmakers are currently dealing with a $2.6 billion shortfall because of the recession, and legislators acknowledge they have little to spend.

However, most of the package would benefit businesses long-term, and the aim is to set the stage for economic recovery, supporters said.

“True economic recovery comes through the creation of new jobs, not by work created through government programs,” said Rep. Tom Graves (R-Ranger), who announced the “Jobs Opportunity and Business Success Act of 2009.”

“The people of this state are the driving force for economy recovery.”

Graves was joined at the press conference announcing the tax breaks by leaders of the House and Senate, who promised to back the package. The press conference was also attended by business lobbyists.

Under the package:

• Employers would get a $500 credit toward their unemployment insurance taxes for each unemployed person they hired. That assistance would be available until July 2010. Unemployment insurance taxes are paid into a fund separate from the state budget.

• Business wouldn’t have to pay filing fees to register with the Secretary of State’s Office for a year.

• The state would eliminate two business taxes, the inventory tax and the sales tax deposit.

• Beginning in 2012, corporate income taxes would be reduced by a half a percentage point each year over 12 years.

“This is a bold agenda, but it’s also a common-sense agenda,” said House Majority Leader Jerry Keen (R-St. Simons Island). He said businesses will create jobs if they have less regulation and lower taxes.

Senate Majority Leader Chip Rogers (R-Woodstock) said if the package is passed, Georgia will be going in the opposition direction of many states.

“Government seems to be finding ways to tax people, tax people, tax people,” he said. “Georgia can stand as a beacon to say there is a better way, a way that works.”

House Speaker Pro Tem Mark Burkhalter (R-Johns Creek) said Georgia lawmakers have neither the money nor the political inclination to do what the federal government is doing, increase spending.

“There are two things government can do. It can stimulate government or it can stimulate the economy and people,” he said. “Clearly this package is going to stimulate the economy.”

The Georgia chapter of the National Federation of Independent Business immediately put out a press release after the press conference praising the proposal.

Some parts of the package, such as the elimination of the inventory tax and killing the corporate income tax, aren’t new. Lawmakers have filed legislation for years calling for the elimination of those taxes.