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Wednesday, December 20, 2006
Raise my taxes at your peril
The Atlanta Journal-Constitution
Georgia House Speaker Glenn Richardson (R-Hiram) said Tuesday that the state’s tax code is ripe for change and hinted at several options, including a flat-rate income tax system, eliminating the state income tax altogether or replacing property taxes with an increase in sales taxes on goods and expanded to services.
Legislators will study options next year with changes possible in 2008, an election year — meaning, of course, that no unpopular tax proposals would be considered. “I’m convinced that the tax structure that has an income tax, sales tax and property tax is hurting our economy,” Richardson said. “Florida doesn’t have an income tax. Tennessee doesn’t have an income tax on its citizens and it puts us at a little bit of a competitive disadvantage.”
An important consideration, he said, is that whatever comes will be revenue neutral. “We will try not to raise any more money and we will try to make sure we raise no less money,” he said. That’s an important point. Politicians raise our taxes at their peril.
Reforming the state’s tax code, though that’s not exactly what he’s proposing, is the grandest of good-government ideas. But it never goes anywhere. So many legislators are talking about this one that it might. A key question, though, is what precisely legislators are trying to achieve. That pretty much defines the course.
Should property taxes be eliminated? I’m not keen on that. The tax is unpopular, but property is wealth. An argument can be made that encouraging ownership by eliminating taxes on that form of wealth achieves social good by promoting responsible behavior and stable communities. I like one aspect of the property tax. It’s one everybody sees in a lump sum, making us all aware of the cost and size of government.
I hate the idea of a tax on services, which is popular at some left-of-center think tanks because it’s seen as most affecting those who consume services, like lawn care and swimming pool maintenance. While I love consumption taxes, the problem with a tax on services is that it’s an easy, painless way for politicians to raise taxes — first here and then there in ways that consumers either don’t notice or aren’t impacted in large enough numbers to mount effective opposition.
For me, I’d eliminate the corporate income tax — and all incentives given through the tax code that force existing companies to pay bounties to future competitors willing to locate in Georgia. Create a tax-friendly business environment that will attract jobs, without giveaways.
The challenge today is to decide which taxes we want gone and which we’re willing to see increased.
