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DEL.ICIO.USEnding state corporate tax would be right move
The Atlanta Journal-Constitution
Faced with a national government that’s on a forced march to socialism, it is encouraging to note that the Georgia General Assembly has begun to stake a different course — one that could actually provide economic stimulus.
An example is a bill introduced last week by state Rep. Harry Geisinger (R-Roswell) that would charge a one-time tax of up to $1,500 on the purchase of an automobile. The kicker is, however, that once the tax is paid, there’s no property tax levied on the vehicle. Ever.
It’s incentive, certainly, to buy a new car. In Cobb County, where the sales tax is 6 percent, the purchaser of a $30,000 vehicle would owe $1,800 just in sales taxes. Thereafter, the car’s owner would pay property taxes with tag renewals.
Incentive to buy a new car? Absolutely.
As introduced by Geisinger, the changeover would be phased in, starting next Jan. 1.
The new system, which applies to both new and used cars, would take effect for individuals when they first register a vehicle. Until that time, owners continue paying ad valorem taxes when they renew tags.
The state gains by initially collecting half the tax on sales of both new and used cars, a percentage that will drop to 45 percent. Local governments will get the other half, rising to 55 percent. In the 2010 year, locals will get at least the sum they collected from motor vehicle taxes this year.
One possibility, and one danger, is that once the “birthday tax” is eliminated, legislators will rush to add new levies onto personal vehicles.
One such possibility is a tax that would go to subsidize hospitals providing trauma care, an idea advanced by House Speaker Glenn Richardson (R-Hiram).
These things are routinely called “fees,” even by Republicans who know better. If a service — trauma care, for example — is financed only by users, it is a fee. If it is financed by others, it is a tax. Language aside, the bill would spur new-car sales and is, therefore, needed stimulus — though the effective date does need to be pushed forward.
The other legislation that sets Georgia on an independent course comes from state Rep. Tom Graves (R-Ranger), an up-and-comer who until it was disbanded last April headed the 216 Policy Group, a band of fiscal conservatives who got together to study pending legislation.
His proposals include some business tax reductions designed to promote job creation.
One is an income tax credit of $2,400 for every unemployed person hired and kept on the payroll for at least 24 months.
The biggie, though, is the declaration that starting in 2012, the 6 percent corporate income tax, which nets up to a billion dollars per year, would be reduced by half a percentage point per year for the next 12 years, when it will be gone completely.
For conservatives, it’s a bold, straight-up and unapologetic statement of a policy objective: the eventual elimination of the corporate income tax. It’s good policy that will make Georgia more competitive and should eliminate the need for most tax giveaways now employed to lure new businesses. Besides, businesses pass taxes along as higher prices.
Declaring intent up-front should, too, keep the critics from taking cheap shots when Republicans grant a business tax break, such as the one now pending to give a tax exemption to Savannah-based Gulfstream on parts used in repairing out-of-state aircraft.
The stereotype is that Republicans sneak around to give tax breaks to their buddies in Big Business. It’s a staple every year, fed by groups on the left that want more money for social programs.
Trying to reduce corporate taxes one piece at a time — the same strategy by which Obama Democrats are creating universal health care — is political suicide for Republicans.
Declare it and do it so that every piece is not deviousness, but intentional movement toward a declared purpose.
Congress heaps mandates, regulations and other pass-along costs onto business. Georgia’s aim is to get part of their burden off.
Good policy, recession or not.
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By Ragnar Danneskjöld
March 3, 2009 8:04 AM | Link to this
Good morning all. We are now enmeshed in the worst set of national economic policies since the Great Depression. The horrific decisions to date, by the Obama administration, condemn the nation as a whole; so far as I can tell, they have gotten everything wrong. Thus the duty of state leadership is to mitigate the damage to the greatest extent possible.
I broadly assess the national errors as (a) raising costs for producers (thereby raising unemployment rates), and (b) meaninglessly stimulating consumption among already-over-extended consumers. Informed state policies would therefore focus on the former, an area suffering affirmative damage from Obamanomics.
(1) Mr. Geisinger’s proposed tax reduction, on sales and property taxes for new vehicle purchases, does nothing to reduce any producer costs. People refuse to purchase automobiles when they fear their jobs are going away. So far as I can tell, the crushing collapse of automobile sales is wholly unrelated to state taxes, and wholly related to employment instability.
A far more effective policy is as in an advertisement I heard on the radio - I think it was Hyundai - promoting a “right” to return a vehicle without further damage to credit rating for any purchaser who involuntarily loses his job in the course of the car loan. The Hyundai promotion addresses the real concern preventing sales of vehicles, employment instability. I hope Hyundai is able to sell a lot of vehicles under the promotion; they deserve it for such innovation. Mr. Geisinger’s suggestion does no significant damage to the state revenues, nor will it have any significant benefit to the economy.
(2) Mr. Richardson’s proposal, to levy a new tax to fund trauma care, serves no corporate cost reduction purpose at all. Seemingly the whole purpose of the new tax is to fund jobs and to secure incomes for those in the health care sector.
Health care and education are the only two areas of the economy with no significant risk of measurable reductions. State intervention in favor or either is gilding the lily. I assess Mr. Richardson’s program as non-stimulative. If it is to be done, it should be done with eyes wide open – the new tax damages employment overall by raising state revenues and expenditures.
(3) Mr. Graves offers two proposals. The first is a corporate income tax credit of $2,400 for any unemployed person hired and kept on payroll for 24 months. That is not bad –the main beneficiaries of such a tax credit would be those companies with a comparatively lowly-paid staff, where $100/person would be a significant portion of the payroll. Restaurants and cleaning/maintenance companies come to mind quickly.
Many such lowly-paid people were thrown out of work by the national socialists’s increase in minimum wage a year ago. The state credit would have a beneficial effect, with minimal state revenue loss. The increase in state income tax receipts from adding workers to payroll mostly offsets the new outlay, thus the proposal would be a win-win. On the level of “morality,” the proposal fosters a work ethic in the employees and benevolent policies in the employer (especially if the employer loses the credit when the employee leaves @ 23 ½ months), virtues not to be underestimated.
(4) Mr. Graves’s other proposal is a “biggie,” as proclaimed by our host, as it goes to the heart of corporate activity and job formation. I think the proposal can be improved. The flaw I see is the suggestion to phase in the program over 12 years, which I think is too slow, too weak to stimulate significantly. I understand the intention, to allow the state to build in the “revenue loss” that a static analysis would forecast. Of course, we have learned from national corporate tax cuts that “static analysis” is always wrong for bold changes. Payroll growth and increases in consumption may bring in sufficient additional revenues to offset the loss of corporate receipts if the reduction is sharp enough.
For that matter we do not have to eliminate the corporate tax entirely, we simply need to be cheaper than everyone else to enjoy the benefit of the change. I do not know how Georgia ranks against other states on corporate income tax rates, but there are surely a lot of companies in high tax states that would jump to a lower-tax environment. Phase-in a significant tax reduction more quickly, and cut state payrolls now; start with abolition of all administrative positions in education. Even as is, Mr. Graves’s second proposal is a winner.
By Churchill's MOM
March 3, 2009 8:16 AM | Link to this
Jim, you are not on the home page again, are they sending you another message??
Today’s work is worse than yesterday..
By Ken Barnes
March 3, 2009 8:26 AM | Link to this
Well, I have heard of bollocks proposals many a time, and these take the biscuit.
Raising a tax on car purchases won’t sell new cars when people cannot get credit or are worried about losing their job.
Tax to fund trauma care is also a nut job proposal. Each person should pay their own trauma care bill through their insurance. I shouldn’t pay for someone else’s trauma care.
The elimination of corporate tax, without a proposal for plugging the revenue hole which will ensue, is not on. Don’t think companies will be rushing into Georgia simply because no corporate tax exists. Georgia does not have the educational base to feed high-tech industry and is not a progressive-thinking state, as evidenced by the ranting of many morons here in the state and by stupid antiquated laws dating back to the 18th century.
My company has lived to regret the decision to open a high-tech facility in south carolina. Couldn’t find anyone from the north to move to that dump. Couldn’t find locally trained engineers worth squat. We are now planning to close shop and move back to Michigan.
By Redneck Convert
March 3, 2009 8:27 AM | Link to this
Well, we’ll never get Trickle Down if we keep taxing big business. They just add it to the cost of things we buy and we end up paying it anyway. If we take the taxes off of big business they will start raking in money hand over fist and after awhile they will have to start spending it on things like hiring people so they can make more money if there ain’t a machine or they can’t shift the job overseas. Maybe they can even afford to buy a bulldozer to handle the cash.
So what we need to do is tax the low income people to the hilt. They won’t have much money left to buy anything, but what they buy will be alot cheaper. Leastwise, if they can’t afford to buy it they can stare at it a long time and kind of wish they had the money to buy something at such a low price. Maybe they’ll decide to take two or three more jobs so they can afford to buy it.
I think making people pay all the car tax when they buy the car is a fine idea. Rich people can just write out a check for the whole car and never have to pay tax again. We can just raise the income tax on the lazy, shiftless low income people to make up the diffrence. This is GA, not some Northren state where they tax high income people more.
Anyway, that’s my opinion and it’s very true. It’s the Libraritarian way, the Republican way, and the redneck way. Have a good day everybody.
By Peanut Man
March 3, 2009 8:28 AM | Link to this
The morning AJC says that none of Saxby buddies at Peanut Corporation of America is going to jail for killing people. Is that fair?
How much money did Saxby Chambliss take from Peanut Corporation of America? What did they get for the money?
By Ragnar Danneskjöld
March 3, 2009 8:31 AM | Link to this
Dear Mom @ 8:16, “Today’s work is worse than yesterday..” Not to a conservative thinker. Jim argues substance, not personalities, so the cultists are at a disadvantage, intellectually. Won’t stop them from posting insubstantial and erroneous blame-throwing.
By ron
March 3, 2009 8:43 AM | Link to this
Good morning,——$2400 to hire someone new and keep them hired for two years.To do what?Manufacture something you can’t sell because nobody’s buying?Maybe business can dump it’s employees and hire new ones to pick up this incentive.
$1500 flat tax on a car and never again be taxed on it.You actually believe that?It will work once and then two years from now the bill gets set aside for new taxes on autos.Possibly retroactive.You can trust politicians,Jim,I don’t.
Phase out the corporate income tax to entice new business.That will work for awhile.The cut would need to be deep and quick.50% and tomorrow wouldn’t be too soon.It would take many months to see a difference.
Maybe some smart politician can come up with a plan to make me,the consumer,want to part with my money for some of the goods that are kicking around unsold at the moment.Stores are full of items at the moment that I’m not buying.A low price might change my mind.That’s only might at the moment.Maybe some businesses can come up with their own plan,because the ones I visit are just as arrogant and stupid as they ever were.My ISP didn’t want to lose my business so they offered me a better deal at less money.They’re smart business men.
One gentleman that I deal with for bulk groceries says that making a dollar is better than trying to make two.He’s a smart business man.He’s prospering in a small town where others have failed.
My 94 Ranger is still purring like a kitten.What do you think the chances are that I’m going to buy a new car any time soon?
By @@
March 3, 2009 8:44 AM | Link to this
Not bad, not bad at all, Jim.
When I mentioned, in an earlier column, that our Georgia reps would need to be innovative after their decision on Obama’s “stimulus” money, I thought I was HOPING beyond “HOPE” but by jove, they’ve done it.
Now that’s what I’m talkin’ about. Something more than “words, just words?”
By Margie
March 3, 2009 8:49 AM | Link to this
I couldn’t resist making a count. Ragnar’s essay was 754 words. Jim’s was 674. No comment, just an observation.
By TOSHIBA
March 3, 2009 9:07 AM | Link to this
I think billy can take you all out
By Ga Values
March 3, 2009 9:08 AM | Link to this
Where is the part about what is going to be done to make up for the lost revenue or what programs are going to be cut.
By Big Bucks GOP
March 3, 2009 9:11 AM | Link to this
Part of the reason the federal government just rescued American International Group for the fourth time in six months with taxpayer money has a lot to do with the possibility of a run on the insurance industry.
It’s a little-discussed but highly unnerving aspect of the crisis at A.I.G., Andrew Ross Sorkin writes in his latest DealBook column.
In the United States, A.I.G. has more than 375 million policies with a face value of $19 trillion. And if policyholders lost faith in A.I.G. and rushed to cash in their policies all at once, the broader insurance industry could falter.
It’s a scenario laid out in a confidential document prepared by A.I.G. for regulators, which is getting a lot of attention in Washington.
By Big Bucks GOP
March 3, 2009 9:14 AM | Link to this
Bank of America didn’t pay its chief executive, Kenneth Lewis, or any of its other top executives a bonus last year, like most major U.S. banks, saying its 2008 financial results didn’t meet its expectations.
By Big Bucks GOP
March 3, 2009 9:15 AM | Link to this
Citigroup may need to raise additional capital despite the U.S. government’s move to bolster its capital base, said an analyst at Deutsche Bank, who sees a 2009 loss of about $4.5 billion for the company, excluding any preferred share dividend payments.
By Big Bucks GOP
March 3, 2009 9:17 AM | Link to this
KKR Financial Holdings, a debt fund managed by private equity firm Kohlberg Kravis Roberts, reported a $1.2 billion quarterly loss on Monday and said it would not pay a dividend for the fourth quarter, and probably not for 2009.
By Big Bucks GOP
March 3, 2009 9:18 AM | Link to this
Offshore tax havens used by rich Americans in Switzerland, the Cayman Islands and other nations are targeted for shutdown by bills offered on Monday by Democrats in both chambers of the Congress.
By Davo
March 3, 2009 9:19 AM | Link to this
Good stuff over at this blog. The 2nd vid is really well done.
The Southern Avenger
http://southernavenger.ccpblogs.com/
By Big Bucks GOP
March 3, 2009 9:20 AM | Link to this
Lawyers for Bernard L. Madoff say the New York City apartment of the Madoffs and $62 million in bonds and cash that they say belong to Bernard L. Madoff’s wife, Ruth, “are unrelated to the alleged Madoff fraud.”
By Big Bucks GOP
March 3, 2009 9:21 AM | Link to this
The lawyer appointed to run the Stanford Group and two other firms controlled by Texas billionaire Robert Allen Stanford, accused in an $8 billion fraud, told a federal court on Monday that the firm faces a dire financial squeeze.
By Big Bucks GOP
March 3, 2009 9:26 AM | Link to this
Despite assurances that the takeover of Fannie Mae and Freddie Mac would be temporary, the giant mortgage companies will most likely never fully return to private hands, lawmakers and company executives are beginning to quietly acknowledge.
By Churchill's MOM
March 3, 2009 9:34 AM | Link to this
How can a man this ugly have beautiful daughters?
http://www.vanityfair.com/style/features/2009/04/noel200904
By Lobby Crooks
March 3, 2009 9:39 AM | Link to this
Ending the “buyoffs” of the crooked lobby crew to the crooked Georgia legislators, as in the Ga Power deal, would help bring back some confidence in our political system.
Now, has anyone seen any action from the useless legislature on a bill that would save lives, as in the trauma area? Of course not as the trauma team has not paid the freeloading legislators off as Ga Power did!!!!
Anytime we think a new crew of legislators will change the crooked good ole boy system we are sadly reminded nothing changes when payoffs are involved!!!
By Chris Broe
March 3, 2009 9:45 AM | Link to this
” eliminating corporate income tax will eliminate the need to lure businesses here with tax giveaways….”
This is how Wooten’s mind works. He is a circular pest.
By Brit
March 3, 2009 9:45 AM | Link to this
Churchill’s Mum, I guess Monica’s genes will out.
By Reality Check
March 3, 2009 9:46 AM | Link to this
Once again we have the Blind attempting to lead the blind!!! What makes the big business groupies believe that additional monies given to Corporate bigwigs will EVER be trickled down to the general public? Business use public resources and as such should be expected to contribute to the tax base. The notion that If you take away the business tax burden things will be better for all of us is just silly. Allowing businesses to operate without sharing the Tax load ony benifits the business.
By deegee
March 3, 2009 9:48 AM | Link to this
What part of bank insolvency don’t the far right understand? For a while my mother’s Fox News was unavailable in her retirement home apartment. She seemed to be objective when discussing the root cause of the financial mess that we face. Then her Fox News came back on. She insisted yesterday that this whole mess was created by people that bought too much home. I asked her what prevented people from buying too much home in the past. The conversation turned to how George Bush tried to stop it and how Barney Frank wouldn’t let him. We were done at that point.
The banking and credit crisis was predictable. There was no political will to stop the housing bubble. The Wall Street investment firms that sold the subprime mortgages as CDOs thought that the bubble would never burst, or that they would be able to get out before it burst. It didn’t happen that way and now the entire world is suffering from the impact of unbridled greed. And, BTW, tax breaks aren’t going to help when you can’t get credit.
By deegee
March 3, 2009 9:58 AM | Link to this
I won’t live long enough to see the daughters when they are 78 years old but I bet they’ll look a lot like their dad does now.
By Ayn Rand was Right
March 3, 2009 10:01 AM | Link to this
Why all this discussion about who should be taxed more, or less for that matter. What would be wrong with the same tax rate for every business and individual? No deductions, no credits, just pay the same tax rate no matter who or what you are.
Of course, the government would be required to live within it’s means. Like the rest of us, the government would need to make sacrifices and save in order to have their special interests funded.
As a high income earner, I would cease being resentful about the amount of money I paid, if my percentage was equal to all others.
Please oh enlightened bloggers, tell me the problem with this plan. When something is too complicated to understand (tax codes, derivatives, bail out and stimulus plans), you can bet someone has a financial reason to make it and keep it so.
By Chris Broe
March 3, 2009 10:02 AM | Link to this
“It’s a staple every year, fed by groups on the left that want more money for social programs.” Staple. Fed. Over the head of your readers, Wooten. You toy with them, don’t you?
Am I the jealous, mediocre Salieri to Wooten’s Mozart?
By Dave from Atlanta
March 3, 2009 10:16 AM | Link to this
All of these plans to stimulate the economy by cuting taxes on buisness assume that buisnesses will hire people simply because they have extra money. This makes no sense. Buisnesses hire people because they have work that needs to be done. Cutting taxes on corporations may have long term benifits for the economy, but it is certainly not going to provide any short term “stimulus”.
If you want to stimulate the economy you have to give money to people who will spend it imediately. This means tax cuts for the lowest income brackets. Stimulus checks like we got last year. Construction projects that hire people who don’t currently have jobs. Anything that gets money into the hands of people who currently don’t have enough. These people are going to spend the money that we give them on good and services. The companies that provide these goods and services will have to hire more people who will be paid and will spend their money on goods and services…. etc.
By Chris Broe
March 3, 2009 10:24 AM | Link to this
Enlightened? No. Enlivened? No. Ensconced and Embalmed? Yes.
Wooten’s entrepreneurial entreaties are enmities to enfranchised entitlements. Enticing enterprise entails enabling, enhancing and engineering enthusiasm for the envied and entrenched enrichment of this blog’s entrant and his entourage.
By Dutchman
March 3, 2009 10:27 AM | Link to this
Dave from Atlanta,
What planet are you from?
If a business can make more money, by hiring more folks to produce more product - They Will!
Money in the corporate coffers does nothing unless it is invested. Investing in more profit is the goal of business.
I have a question for you -
If I raise taxes on businesses, they have to layoff folks or cut expenses somewhere else.
If they layoff folks, that impacts the middle class. These folks can no longer eat out or go to the movies, shop or other wise spend disposable income - guess who takes the hit - those working at these places.
It really is a trickle down economy, no matter what any leftie says
By Sharecropper
March 3, 2009 10:34 AM | Link to this
Only a daffy wingnut would suggest such demonstrably failed Republican policies. Dunno how to bring it up, but even in Georgia, owned lock, stock and barrel by the Georgia Power Co., after all these years, corporations have a moral obligation to support the commonweal. Geez. How does one claim ending their taxes would increase business, or jobs? Nobody takes a tax savings and creates a job he doesn’t need.
With so many AJC folks losing their jobs, how does Wooten keep his?
By Cardinal Red
March 3, 2009 10:35 AM | Link to this
Dave of Atlanta said: “If you want to stimulate the economy you have to give money to people who will spend it imediately. This means tax cuts for the lowest income brackets.”
Hey Dave! When those lowest of the lows spend all that government wealth on crap, forcing themselves out of house, apt. or trailer park, are you going to whine on their behalf again?
Bush’s stimulus hand-out did nothing to stimulate. Obama is making the same mistake except his comes with a humongous deficit to be paid down by future generations who will never be able to find their head above water.
Dave, you are going to be poor, I’m going to be poor and our children and their children are going to be poor with Obama at the helm of this fast-sinking ship of fools.
By Reality Check
March 3, 2009 10:38 AM | Link to this
Dutchman, I see you paid attention in class but I also see that you have not spent very much time in the real world….. An Increas in corporate cash means alot of things, but it does not mean a company is going to hire new workers. The money might be used to pay down debt. It might be used to aquire another business, or it might be used to pay increased dividends. The notion that If you give a company more, they will throw some crumbs to the little people is good in theory, but in the real world…. not so much.
By Jason
March 3, 2009 10:44 AM | Link to this
“If a business can make more money, by hiring more folks to produce more product - They Will!”
Why would a company hire people to make more products when there’s no one to buy the products it’s already made?
By Terrence
March 3, 2009 10:45 AM | Link to this
What is wrong with your readers, Wooten, that they can’t seem to trust the companies that employ millions of people but yet they can trust self-serving politicians of any stripe?
Geez! Business needs money to expand. That requires more employees. Their survival depends on it. Who, among us, doesn’t want to survive? It’s basic instinct.
Are your readers only into bloated government looking to expand their power over the people?
With morons like the government-dependents on this board, we’ll sooner rather than later, find ourselves being held down by the bureaucratic thugs in D.C. who will determine when and how much we can prosper.
Freaking morons! This country is suffering a plague of them!
By Dan
March 3, 2009 10:46 AM | Link to this
the simple fact is corporations don’t pay tax anyway. They collect it, you raise the rates, they raise the price to the consumer, it’s not about greed it is simple logic. Taxing businesses helps nobody but the politicians who can then pander to the economically ignorant voting base. The reason business are far more efficient economically is beacause, they have one driver…money. With government and politicians you never really know what is up their sleeve, aside from the fact it is never the same as what is coming out of their mouth.
By ron
March 3, 2009 10:46 AM | Link to this
I note with interest the fight for the control of the Republican Party between Michael Steele and Rush Limbaugh.The Great Minority Hope versus The Crazy Man.Apparently Republicans are all going to become Dittoheads in the future.This usurping by the ego that’s even greater than The current President’s of the Voice to be listened to by conservatives isn’t just going to go away.Rush is here to stay.He personifies exactly what’s wrong with the GOP.
By Curious Observer
March 3, 2009 10:58 AM | Link to this
So the rest of us are supposed to pay the costs of corporations’ clogging up the civil courts with suits against one another? The next time you’re called for jury duty, just scan the calendar on display at the lobby area. You’ll find that insurance companies, in particular, dominate the calendar. If they had to pay the actual costs of their litigation, you can bet that justice for everyone else would be speeded up.
Wooten’s diatribe today is yet another example of supply-side economics at work. Would-be customers have no access to money for buying products and services, but that doesn’t stop Wooten. His assumption that providing more tax breaks to businesses will somehow result in jobs is particularly ludicrous. If customers have no money to buy the output of businesses, it doesn’t really matter how many taxes are cut for corporations.
By Dutchman
March 3, 2009 10:59 AM | Link to this
Jason,
If no one is buying there product, where would they get the funds to invest. duh!
By Reality Check
March 3, 2009 11:03 AM | Link to this
Terrence @10:45 am
Here you go…. Business don’t expand because they have more money. They never have and they never will. Businesses expand when their business grows. The growth in business is driven by alot of factors and just having increased cash won’t make it happen EVER!!!! Please understand that Business leaders don’t care about creating jobs and more that politcians care about voters. Thats why a factory will move to Mexico instead of Texas. The object is to increase profits not put people to work. Business leaders push to increase production and decrease personnel because it is better for the business. Don’t be misled .. ( Sorry it sounds like its to late for that request)
By Wynn
March 3, 2009 11:14 AM | Link to this
Businesses aren’t buying Obama’s product which is bullchips — that’s why the market is tanking and americans will end up as the chickens in government’s potluck.
By Jake
March 3, 2009 11:19 AM | Link to this
Dutchman - Tax is just like any other business expense. If it goes up the first alternative is to raise prices and pass the increase on to the customer. Then the government might create jobs using the tax revenue, something Obama is trying to do.
By Chris Broe
March 3, 2009 11:20 AM | Link to this
The market is watching us Mass Our Troops on the Pakistani border.
Ironically, Fear is Dear to Shorts.
By Jason
March 3, 2009 11:21 AM | Link to this
“If no one is buying there product, where would they get the funds to invest. duh!”
Huh? They don’t have funds to invest because their sales are down. Their sales are down because people aren’t buying their products. So why would they make more products?
By Terrence
March 3, 2009 11:23 AM | Link to this
Tell me Checking out of Reality. Are you saying that Obama’s genius has left you without “hope” of ever being able to buy goods again? Have you accepted Obama’s demand that you remain poor forever?
Surrendering to the realities, are you? That’s what it sounds like to me, “hopeless.”
By Reality Check
March 3, 2009 11:33 AM | Link to this
Terrance, President Obama is not the keeper of my fate or my wallet. That goes double for the crooks in the boardrooms. I control my own destiny. That being said, I know that while a free market is good, it is not the end all to be all. the Theory will never match the application. The sooner that people realize that the corporate world is jsut as crooked as the political world the sooner the public can start to make real choices. You blaming the presidents shows that you are a follower not capable of understanding for yourself what is going on and all the dynamics that will be nessasary to fix it. Please turn off Fox and pick up a book!! Read, research, and understand… then bring a better argument to the table.
By Diogenes
March 3, 2009 11:37 AM | Link to this
Good morning, Jim,
You state “Incentive to buy a new car? Absolutely.” That’s far-fetched. That is a strong incentive to hold onto the old Taurus for a few more years. Taxes on it are low. It’s a good idea only if it increases revenue for the state, and I don’t see that it does. I think we can quietly bury that notion and hope that it never resurfaces.
You also comment “The biggie, though, is the declaration that starting in 2012, the 6 percent corporate income tax, which nets up to a billion dollars per year, would be reduced by half a percentage point per year for the next 12 years, when it will be gone completely.”
Sounds like conservative fantasies again. You state yourself that it provides a billion dollars a year in revenue for the state. How will the state make up that loss? By making government even less effective than the conservatives have already made it? Let’s hope this one dies a peaceful death and is never heard from again.
By Dutchman
March 3, 2009 11:42 AM | Link to this
Jake,
BHO, raises taxes on business, the cost of all items goes up, folks can not buy as much.
They go to a competitor that is also raising its prices - few items are sold, business revenue goes down, less taxes paid by business.
Who is helped? Yours is a flawed way of thinking.
Answer me this. A corporation is taxed as if it is a person, then why is their tax rate not in line with the maximum in the personal tax tables?
An exercise in thinking -
If I make something and make $1 per item as pure profit - after all expenses related to the product, I get to pay 35 cents of that to the feds. ouch.
To expand I may have to raise my profit to $1.25 to afford expansion. But with this economy, I can’t because my main competitor is selling with in pennies of my price. I can not afford to raise the price.
Where can I turn? Cut expenses? Maybe, depends on what and where they are? Increase the number of outlets? Depends on how much the market will bear. One thousand wigits might be enough for the market and 5 thousand might cause a glut and drop prices - oops, there goes my profit.
Many factors are in play and I can only expand if there is enough market to support my product. Nowadays, the market is shrinking. People are scared of the near future and the economy.
Those 6 employees may face difficult choices in the near future.
By ron
March 3, 2009 11:46 AM | Link to this
Dear Reality Check@11:33——Well spoken on the corporate world,except that it may not be as honest as the political world.I have been there and seen it.Never underestimate the duplicity of the people running corporations.Their greed has no equal in politics.
By Chris Broe
March 3, 2009 11:51 AM | Link to this
I’d rather have health care than a SUV. Let China sells us their $5K Camrys and let us put out that fire in Pakistan. Most of this bailout is to protect invented wealth, imaginary wealth created out of the risk inherent in any contract. Thin air and hot air. Then some criminal einstein starts betting on whether the fool can pay his mortgage with all that beer in the fridge. Then they gamble on some other spin of a John Doe. It’s invented wealth. Thin Atmosphere. Merry Airheads saying, “Let them twitter cake”.
World Markets cant find a bottom because of the open-ended short story Bush hasn’t finished telling the world yet about 911. Why did he miss Osama? We all know that he gave the order for that rummy general to attack. The rummy general didn’t attack. Bush couldn’t get his general to attack any better than Robert E Lee could get some of his generals to attack. What happened?
What happened, Mr. Bush?
A civic volunteer wants to know.
By N.J.
March 3, 2009 11:52 AM | Link to this
Conservatives remind me of a retarded cat that continually sits on the same hot stove.
In spite of the evidence, tax cut historically have NEVER stimulated economic activity. NEVER.
It must be brain damage or something, because a few short years ago, the federal government doled out nothing short of 2.1 trillion dollars in tax cuts, which was at the time, more than one fifth the annual gross domestic product. It was the largest tax cut ever given. If tax cuts were effective, the United States should have been and still should be riding high on a wave of of great economic growth.
Instead, we are in an economic crisis of epic proportion.
People like Wooten here are the ones really misleading the public, because historically, those businesses and wealthy people who are the recipients of large amounts of dollars given to them in tax cuts RARELY use that money to invest in a business that they own, rarely use it to hire new employees, rarely use it to purchase new plant equipment or open another business. Over the last 30 years, the total percentage of tax cut money that has been used by those at the upper income to reinvest in a business they might own, or for hiring new employees has bee pretty much fixed at 4 percent. The other 96 percent has ended up invested in either the stock market, or in some commodity based investment, like Mortgage Backed Securities.
That is to say, every tax cut ever given has ended up creating a speculative market, followed by a market bubble, followed by a market crash, followed by recession or depression. Nothing else can result from giving large tax cuts to the wealthy or to businesses.
The idea of using money gained from tax cuts to expand a business violates the very principals of economics taught in a first year college economic class.
You ONLY hire new people or purchase new equipment of open a new store or factory if doing so will create enough profit on a regular basis to at very least pay the cost of doing so, and what you really want is for the expense to create more than it costs, which is what a profit is.
No amount of supply side tax cuts will create a demand if their is no market. There is plety of supply, as there was at the start of the great depression.
There were no shortages of food or products, or services during the years between 1929 and 1933. However millions of people in America starved to death or died of malnutrition related diseaase during this period because they did not have the money to buy food and to pay for other needs, and soon after, supplies of these items started to dwindle. Food production fell off as farmers had their farms taken back by banks that had no experience in running farms.
30 years of “supply side economics” has had the government borrowing trillions of dollars and frittering it away in tax cuts for the wealthiest, in the idea that if you create supply, demand will follow. This is Rube Goldberg economics at its finest. This columns title “Common Sense Conservatism” is a misnomer at the very least, or Orwellianism at its finest. Wooten has never shown any degree of common sense at all
This idea “that supply creates demand” has created a sick economy that is not based on “Common Sense Economics”
By Dusty
March 3, 2009 12:31 PM | Link to this
Chris Broe aka PoFo 11:51
Lincoln could not get his generals to attack, not Robert E. Lee. After dumping several generals, Lincoln got Grant. Under Grant was the pyromaniac Sherman who broke all rules of war by burning and looting throughout the South, barbarian style.
You asked “What happened, Mr. Bush?” After 9/11, President Bush kept us safe from terrorists and freed two countries from tyranny. Now he has completed his terms and is watching Obama run up a debt many times larger than anything he,President Bush, ever accumulated. He watches Dems get SMALL CHANGE in their pockets with joy. Republicans sigh sadly.
So, PoFo, if you keep your feet on the ground, you too can be a great economic advisor like all the other bloggers here. If you stop making journalist corrections I will give you a C+ or a B-. If it snows again, you get 32 degrees from Ms. Jamie’s Tip Top School for Toddlers.
By Melody Dareing
March 3, 2009 12:57 PM | Link to this
Ok, my husband and I own a business. Owned it for seven years, so I know of what I speak. It’s a small business, and I do mean small. We are not “wealthy, greedy, business owners” as some of the left like to lump all business owners. Here are some of the taxes we must pay: Federal coportate taxes, state corporate taxes, state sales taxes, local county sales taxes, annual county taxes on our business equipment—-even if it sits in storage most of the time and doesn’t always make money for us—-personal income taxes on the money we made from our business even though we just paid taxes on it in the corporate taxes, vehical taxes and ad valorem taxes on our vehicle. That is without owning real commercial property, which would be more taxes, and without employees. By the way, we had employees, paid them well but 1)had to pay all the taxes associated with them—-which is about three types at least—-plus workman’s comp and 2) most employees think business owners are rich and will steal and cheat. One committed a fake fall—-twice—-to sue us, our company and our workman’s compensation. She got $800 from us and $3,200 from workman’s comp but it cost $8,000 out of our pockets to defend ourselves. So, now we simply use temps when we need them rather than offer full-time jobs. The state and federal government didn’t care we had a lot of legal fees nor that we were just getting started and not making a lot of money and were struggling. We still had to pay all our taxes on time. That put a stranglehold on our business that has taken over five years to get out of. In the meantime, we couldn’t get loans because we owed taxes and were in a lawsuit. Plus, there is no where for us to go when people, vendors or institutions—-like Suntrust Bank who issued our orginal commercial loan—does things that are inappropriate, questionable, and possibly illegal. Lawyers don’t represent small businesses. No money in it. And I won’t even get into regulations. We would love to grow. We would love to buy commercial property. We would love to hire employees and pay them well and have them truly be a part of our corporate family. We would love to give to community causes. We want to do everything right, but current rules and regulations put such a noose around our necks that we can’t. That is, in my opinion, one reason the economy is stifled. Grow small business, give us a chance to survive, and the economy will grow with us.
By Jake
March 3, 2009 12:59 PM | Link to this
Dutchman - I don’t understand your tax rate questions. For 2009 personal income tax rates range from 15-35% and corporate rates from 15-39%. Tons of differences in brackets, deductions, etc. but the rate ranges are virtually the same. Also you’re raising prices without raising wages and that isn’t usually what happens. 42 years ago my first job paid $1 an hour and McD’s cheeseburger cost $.12 so I made 8+ cheeseburgers an hour. Today the cheeseburger is about $1 and I make 40 cheeseburgers an hour. Am I better or worse off?
By Ayn Rand was Right
March 3, 2009 1:02 PM | Link to this
For all espousing the evils of corporate America and what it does with tax cuts (by the way this is allowing them to keep more of the money they make), please share what the government produces with the money they take (taxes). Yes, they can do good things with my money, so can I. Yes they can employ some people with my money, so can I. What does the government produce that stimulates our American economy more than Corporate America?
By Ragnar Danneskjöld
March 3, 2009 1:02 PM | Link to this
Dear Jason @ 11:21, “So why would they make more products?” You are on the verge of understanding. If the government imposes greater costs on business, there is less incentive to take a chance on finding a new market, offering a new product. When Nancy Pelosi declared intent to impose the largest tax increase in the history of the world, the simple consequences were obvious to all. So long as there is no incentive for accomplishment, there will be no accomplishment. The leftists do not understand “incentive.” They understand only disparagement and fear-mongering.
Dear ron @ 11:46, “Their greed has no equal in politics.” While I think you err – they are fully equal, except that politicians also want to control the personal lives of all – you omit discussion of the greediest of all, the bureaucrats.
Dear NJ @11:52, “In spite of the evidence, tax cut historically have NEVER stimulated economic activity. NEVER.” You offer a fact free assertion, unrelated to reality. I perceive your field is polisci, given your lack of economic foundation.
By ron
March 3, 2009 1:29 PM | Link to this
Dear Ragnar@1:02—-While I agree with you that Politicians want control and bureaucrats are greedy,they are at least semi held in check by laws and public opinion.Not so Richard Fuld et al.They are almost lawless individuals with no sense of decency at all.Their greed is limited by only what they dare to take,and they’re becoming more daring each passing year.They used to steal only hundreds of thousands,now it’s hundreds of millions and in a few cases the robbery is in the billions.They are unrepenent about their thievery almost as if they thought it was their right.
Right at this moment they’re stealing from the government,us,we’uns.They’re funneling money into Goldman Sachs through AIG,and they are going to get billions more.They’re going to funnel this money through the same channels and the executives are going to walk out with whatever they want their share to be.It will be large,you can bet on that.The bureaucrats may get theirs,but their share will pale beside others.
By Jason
March 3, 2009 1:32 PM | Link to this
“‘So why would they make more products?’ You are on the verge of understanding. If the government imposes greater costs on business, there is less incentive to take a chance on finding a new market, offering a new product.”
Not if there are lots of people with disposable income demanding its product. Conversely, it doesn’t matter how low a business’ tax rate is if its would-be customers have no money to spend.
By Ragnar Danneskjöld
March 3, 2009 1:44 PM | Link to this
Drudge has a funny link, to a Breitbart story: The Empty Suit advises us that “paying too close attention to the Wall Street’s ‘fits and starts’ could lead to bad long term policy.” Good to know that the unprecedented 7,000 point drop in the Dow is merely a fit and start to be ignored. By that standard the 9/11 attacks were mere impetuous Islamists doing what Islamists do.
Dear Jason @ 1:32, you err, but it is the error of the elitists, those who have to reject Say’s law to justify their control over the economy. A healthy jobs economy leads to consumer spending, not the other way around.
Obamanomics are indistinguishable from the futile policies of Hoover/Roosevelt and from those of the Carter administration. And from those of Peron’s Argentina, and those of Japan’s failed decade beginning in the mid 1980s. The record of failure is striking in its consistency - in 100% of the cases there was no relief sooner than 10 years, in sharp contrast to the histories of tax cuts, which led to growth within 18 months in every instance.
By Ragnar Danneskjöld
March 3, 2009 1:50 PM | Link to this
Dear ron @ 1:29, perhaps we will have to disagree. From my view the losses attributable to the FNMA/FHLMC thefts top all of the thievery by all of the corporations combined.
By Reality Check
March 3, 2009 1:55 PM | Link to this
Ragnar,
Bigger than Enron, or Madoff, or Health South??
By Ragnar Danneskjöld
March 3, 2009 1:57 PM | Link to this
Evil snarky line crosses my mind: which Islamist-led group did more damage to the economy, the ones who attacked on 9/11, or the one who is spending more taxpayer money than any in history?
By Ragnar Danneskjöld
March 3, 2009 1:59 PM | Link to this
Dear Reality @ 1:55, fair question. The tab so far, for the housing/mortgage collapse, is a $10 Trillion drop in stock value. Can you top that?
By Ragnar Danneskjöld
March 3, 2009 2:04 PM | Link to this
Honesty compels me to correct myself reality @ 1:55. In truth the collapse from the FNMA/FHLMC thefts / housing mortgage collapse was probably only around $2-3 trillion. Most of the stock market collapse is attributable to the largest tax increase in the history of the world.
By Reality Check
March 3, 2009 2:14 PM | Link to this
Ragnar,
Yes… I will assume that we can all agree that the largest pecentage of value that has fallen out of the stock market was there on paper only. Inflated far beyond the real value of the actual assets. The Money that was pilfered by the “big three” was real.
By Ragnar Danneskjöld
March 3, 2009 2:16 PM | Link to this
Most of you have a recollection of the 2000 “dot com” bubble and the 25% stock market “correction,” and you are tempted to tell yourself that this 50% drop now is the same. It is not.
The “dot com” bubble was explicitly an overvaluing of stocks with no history of income nor even clear business plans, a mania feeding on itself. And there was a similar mania in housing pricing in a few areas – California, Florida, Arizona, Nevada – coupled with a pervasive economic collapse in Michigan that damaged housing prices.
However, that housing-price mania did not reflect in stock market values, in stark contrast to the dot-coms. The loss in stock market value this time is loss of real value, due to the bleak outlook inflicted on the economy by the politicians. This one is different.
By Ragnar Danneskjöld
March 3, 2009 2:22 PM | Link to this
Dear Reality @ 2:14, the wealth of nations is not found in its supply of gold or its accumulation of widgets, but in its earning capacity. We have a significant adverse change in our private earning capacities today, a change brought by a new government. Change we can believe in. Yes we can.
By Reality Check
March 3, 2009 2:27 PM | Link to this
Ragnar, you are dismissing the most important factor in this entire mess…. The assets that were being packaged, sold and resold were grossly overvalued and the lie about thier value was restated at everysale. Any invester worth his mettle should have known that in a given zip code, a 40% annual increase in the value of homes was not real. Everyone knew the fix was in, but because the checks continued to be written, they all stood in line hoping to get to squeeze the golden goose before she ran dry. The street played fast and loose with the phantom money and just like a that the game was over and they ( and by default us) were left holding the bag.
By Sharecropper
March 3, 2009 2:29 PM | Link to this
Re “Dusty”: You are an idiot with no knowledge of history beyond Uncle Remus. Stop pretending to understand Civil War history. You embarrass yourself.
By Reality Check
March 3, 2009 2:39 PM | Link to this
Ragnar@ 2:22
Our capacity to earn has not deminished. At some point, The American people will adjust to the new market conditions, and once again start the engine that drives this economy. Government intervention will be a part of the fix, so will good old American inginuity. The people will adjust and we will start to grow agian. The market won’t look like it did six months or even two years ago, but our economy wil continue to move forward.
By Rag is a Rush Toolette
March 3, 2009 3:06 PM | Link to this
Rag - The DOW dropped about 40% 14,000 to 8500 under the previous administration and, so far, about 20% 8500 to 6800 under Obama. The markets haven’t approved of the bailout plans or budget but a lot of the 20% is the continued deterioration of AIG and what it says about the still underreported enormous losses in the mortgage backed securities and derivatives. Do you think AIG marked 100% of their assets to market to realize the latest loss? I guarantee there’s more to come, a lot more.
By Leon
March 3, 2009 3:43 PM | Link to this
C’mon Rag aren’t you being a bit melodramatic? This is just our “bummer economy” that ol’ J Dub told us about the other day right?
And speaking of a “fact free assertion, unrelated to reality”. What do you call “Most of the stock market collapse is attributable to the largest tax increase in the history of the world.” Well?
By Morehouse Guy
March 3, 2009 3:48 PM | Link to this
Interesting idea. And as a matter of simplistic, textbook economics it’s very appealing as a conceptual matter, hell downright seductive. It’s simple—eliminate the state corporate income tax, the jobs will come by the baleful, Georgia will be the most economically competitive state in the union and there will be chocolate rain. I wish that were the case.
I appreciated the proposed incremental reductions in the tax, and I can only hope that there is some attending assessment of the degree of economic development directly attributable to the reductions in the corporate income tax. If after these annual assessments, where the linkages—between the corporate income tax reduction and economic development—are made clear (with some reasonable degree of statistical certainty), and justify the reductions in revenue losses, I’ll be the first one cheering on this enactment. It could very well be a wise investment in the State.
The empirics, however, tell a much murkier story. See Sarah Coffey’s 2008 study (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=822989) suggesting that nontax policy and other subsidies would be more efficient supports for Georgia businesses. Further, a fairly robust body of literature (see for example http://www.cbpp.org/3-27-01sfp.htm) exists that suggests that business locational decisions hinge on state tax policy to a much lesser degree than Jim lets on, and some economists have shown that no statistically significant correlations exists between state business tax burdens and new investment (see for example Robert Tannenwald’s, “State Business Tax Climate: How Should It Be Measured and How Important Is It?”). Further, tax loopholes, tax credits and various exemptions should draw the kind distinction between nominal rates of taxation (that trouble many of us) and effective rates of taxation that Jim leaves unexamined to the detriment of this discussion board. The more appropriate question: given the effective tax in the state of Georgia, how do we compare? That’s a question I think is worth considering.
If anything, it would seem to me that the tax reductions should be targeted to the state’s smaller businesses (as opposed to blanket reductions) whereas previous empirics demonstrate that Fortune 1000 companies spend very little of their earnings on state corporate income taxes (see for example: Robert Cline, William Fox, Tom Neubig, and Andrew Phillips, “A Closer Examination of the Total State and Local Business Tax Burden,” State Tax Notes, January 27, 2003, p. 299) and unless tax rates are confiscatory, they alone are unlikely to alter business investment decisions.
To me, the central inquiry: will the reductions in state revenues be offset by higher revenues (possibly through higher personal income tax collections) or some other net social benefit? That should be the overarching legislative objective, but I doubt if this will be answered in earnest. I hope my suspicion is proven wrong.
Now, some (and I can guess who) will find issue with my reluctance to buy into this notion wholesale that there is an empirical “b-line” from state corporate income tax reductions and gains in jobs, corporate earnings, personal income, consumer demand, more jobs, etc. I am open to admitting that this could be true, and I hope that it is true if enacted.
And I applaud the state legislature for the incrementalist approach they embrace here that will hopefully ensure that the necessary annual considerations be made that ensure that the tax reductions actually do what the drafters of the legislation say that it will do—grow Georgia’s economy. Otherwise, it would amount to yet another form of “giveaway” not entirely different than the social program spending that some loathe that amount to unjustifiable “giveaways.”
I’d caution AJC readers against slipping into the “easy beauty” of overly simplistic, un-nuanced interpretations of textbook economic theories. As I’ve stated in previous posts, they should provide the backdrop for our decisions and only compel further inquiry and not be used to support unexamined conclusions of the proper course for our fiscal policies (or any public policies for that matter).
As some would suggest, I won’t simply defer to the legislature. This isn’t a court of law, where such deference in many cases would justifiable with respect to our elected branches, so as a citizen I think I’m duty-bound to demand that my elected officials adequately justify and present the empirical basis for their enactments such that they meet the legislative objectives that they put forth.
I apologize in advance if I screwed up the links.
By Dusty
March 3, 2009 3:49 PM | Link to this
Ragnar,
You are doing wonderfully well today. I hope you keep driving home those words “Most of the stock market collapse is attributable to the largest tax increase in the history of the world” and tell us again who gave us that burden. OBAMA!
Economics is not my field of endeavor. I was taught home grown economics; honesty, independence, thoughtful thriftiness and sensible decisions. That seems to make me outdated in today’s affairs. The new CHANGE is directly opposite to what I was taught. Socialism is not independence. I cannot accept it as good.
Do keep giving us the truth in today’s economics. You know about that which you speak. The truth is always most effective.
Sharecropper,2:29
You’ll always be a sharecropper, never doing anything on your own. We know yur type. They’re trying to run the country now. All of us may have to “share” in your fiasco.
As to history, everybody knows that Fannie and Freddie learned from “carpetbaggers”. They bagged up the mortgages and then tried to run. Ruined the economy and a great many homeowners. They made a CHANGE all right. Ripoffs for ruin.
By Dusty
March 3, 2009 3:56 PM | Link to this
Morehouse Guy, 3:48
Why don’t you submit your empirical ideas to the Obama administration instead of the state of Georgia?
We’d all like a few more facts about some of these murkey “gonna be all right” project promises that run into the trillions. Now that’s a fact.
By Chris Broe
March 3, 2009 4:04 PM | Link to this
I have no more faith in Obama’s bailout than I did for Bush’s bailout. We can find the market’s bottom if every American remember what Michelle O said, “Ask HOW you can go Full Can-do for your country AND how your country can go Full Can-do for you. ”
The octuplets and their mother are a court of nine possible jurors to replace the ailing member of our beloved Supreme Court. Of course, they have preemptive preemy immunity. You couldn’t get anyone to volunteer to run for the Supreme Court without inherent preemptive immunity from subpoena, now could you? (Is that anything like not passing the bar and taking the fifth about why?)
Supreme Court Subpoenas? Can the Supreme Court Subpoena voting records? DId the Supreme Court have the subpoena power implied in their act to stop the recounting of the voting records in 2000?
CNN just reported that history has ruled that the Octuplet’s Mom gave birth to Rush Limbaugh. Boy, has THIS guy been reborn again! He’s the guy in charge when the president is black. I get it.
Rush’s best line: A potatoe is a terrible thing to waste.
By Curious Observer
March 3, 2009 4:06 PM | Link to this
In referring to “the largest tax increase in the history of the world,” Ragnar is looking at the coming lapse of the Bush tax cuts for the wealthy. By the same logic, the Bush administration must have fought for enactment of the “largest tax cut in the history of the world.” It’s all very melodramatic, a characteristic of Ragnar’s rants.
Don’t try to tie this one to Obama, Dusty. Those tax cuts, coming so irresponsibly in a time of war, helped get us in the budgetary hole we’re trying to dig ourselves out of. Instead of raising taxes to pay for the war, Congress and the Bush administration borrowed the money—then insisted on keeping the expenditures off the annual appropriation bill. It wasn’t even counted as part of the annual budget deficit. I wish I could operate my own finances that way—just write bad checks but not have them counted as part of my household financial situation.
I look forward to the end of 2010 and the coming of a more equitable tax system. We can already see and experience what the Bush tax cuts did for our economy. Lots of jobs out there? Businesses in great shape? Plenty of money circulating? Stock market booming? Awash in credit yet?
By Bring Me the Head of Deforest Kelley
March 3, 2009 4:09 PM | Link to this
Another goofball idea from a typical dumbass Georgia legislator:
If this $1500 flat fee replaces the county sales tax on the purchase of a car, it acts as a disincentive to purchase an more economically-priced automobile. 6% sales tax may come to $1800 on a $30K automobile Jim, but only $900 on a car half that price. Which means someone buying a Kia or Hyundai is paying more. But of course you and all your Republican buddies who need a break on the price of a Lexus will be sure to benefit from this at the expense of everyone else.
This fee also means more of our tax money is controlled by the state than by our local governments. Which means some other dumbass legislator from some other part of the state is having more of a say in how your money is spent than someone you elect. Great. They’ve already done such a good job in this state addressing real problems….. I’m just waiting for the other shoe to drop. You know the followup peice of legislation that forces this collected fee to be distribued to each county in equal amounts, regardless of where it comes from.
Its policy like this which shows why Georgia continues to lag the rest of the nation in any representation of standard of living. And its politicans continue to cast the state into perpetual irrelevance on the national stage, espeically when they work to counter the efforts of the federal government acting in the state’s best interest. For a state that used to be considered progressive (decades ago), Georiga sure has fallen a long way.
By Morehouse Guy
March 3, 2009 4:09 PM | Link to this
I feel precisely the same way about the Obama administration and the Franklin administration. Believe you me, I had some serious misgivings about the stimulus package, but they provided the bases/assumptions for their job estimates on the change.gov website. So, I could at least determine how they made their decisions.
EVERY elected official should be held to the standard I embrace above. As I’ve stated earlier, I’m an empiricist, so all public decisions should demonstrate their net social benefit or provide some other compelling reason to gain my support. As fiscal stewards, we should ensure public value is created not only when the legislature spends our tax dollars but when the opt not to. Opportunity costs are real.
Again, I’ve stated in previous posts, I have no ideological axe to grind. I only want our elected officials at every level of government to make their cases clear when they ask for our votes and our support.
By deegee
March 3, 2009 4:11 PM | Link to this
Would Morehouse Guy like to comment on the importance of a stable work force, good schools, transportation, natural resources, infrastructure and cultural and leisure amenities with respect to corporate relos? I’m sure that the goobers in the legislature haven’t given those issues one ounce of consideration. If your only tool is a tax break then every challenge looks like a tax.
By ron
March 3, 2009 4:24 PM | Link to this
We can disagree,but remember that those you attribute the losses to were coprorations as well.
Remember the ratings people,Moodys and S & P?The ones who do the rating.Ratings done on a basis where the higher the rating,the more they charge?They were innovative for so long with Fannie Mae and Freddie Mac that when caught,the bottom was no longer visible? Their people were rewarded to come up with any reason they could think of to award top ratings because that’s where the profits were.Sheer greed kept the ratings high.All done for profit.Had these ratings been realistic,this mess wouldn’t have happened.
By bubba
March 3, 2009 4:28 PM | Link to this
Bubba’s famous quotations:
Ronald Reagan: Mr. Gorbachev, tear down this wall. Barack Obama: Mr. Geitner, tear down this economy.
By Chris Broe
March 3, 2009 4:41 PM | Link to this
Moody’s and Risk: The corrupt synergy occurred when it became profitable to rate a risk outside of generally accepted accounting principles.
This whole thing is an accounting problem. I have an accounting degree. I can read a P&L. And know when it’s tree.
I know what happened to our economy. I know the how, why, where, and who of it.
Accounting is an art. Accounting is negotiated liability for the art part.. Accountants intone surety with mantras about generally accepted accounting principles. (GAAP)
According to GAAP, this risk is a risk.
By Dusty
March 3, 2009 4:46 PM | Link to this
Curious Observer,
Perhaps you have not noticed that Obama, not Bush, has given us a budget in the trillions so laced with the well known pork projects long yearned for by liberals. It is now bulging out of Washington.
Bush kept us safe and it was expensive. Obama sinks the economy without even realizing it. Or perhaps I should say his advisors are sinking the economy. I don’t think Obama knows any more about the economy than any other “community organizer”. He should have stayed with his old job, getting out voters and looking for ways to get handouts from the government. Now he gives away what is not there to give. Great economics!
By Chris Broe
March 3, 2009 4:52 PM | Link to this
Obama: ” Mr. Osama, I’m gonna tear you up”.
There is no question that Obama is going to get Osama. This is going to turn everything around. Get out of Iraq, and get Osama, and then we get our country back, the one we lost on 911.
By The Eighth
March 3, 2009 4:56 PM | Link to this
“fits and starts” and “day to day gyrations of the stock market”. The more Obama speaks without a teleprompter, the more and more trouble we realize we are in. The Age of Obama: Punish Prosperity. Demonize Achievement.
By Dusty
March 3, 2009 5:05 PM | Link to this
Oh yes, OBAMA IS GOING TO GET OSAMA!! That is..if OBAMA CAN GET OSAMA to play in a basket ball game. Then Obama has a chance. Otherwise…NO!
By deegee
March 3, 2009 5:05 PM | Link to this
SMACKDOWN 2009!
Robert Gates, the only Cabinet member held over from the Bush administration, also told moderator David Gregory that President Obama “is somewhat more analytical” than his predecessor.
“He makes sure he hears from everybody in the room on an issue – and if they don’t speak up, he calls on ’em,” Gates said. “President Bush was interested in hearing different points of view, but didn’t go out of his way the make sure that everybody spoke if they hadn’t spoken up before.”
Initially, when Gregory asked what’s different about working for President Obama versus President Bush, Gates said with a laugh: “That sounds like the subject of a good book.”
By lovelyliz
March 3, 2009 5:08 PM | Link to this
If corporations aren’t going to pay taxes then they lose the right to redress the government no lobbying and they must not receive taxpayer services.
By Chris Broe
March 3, 2009 5:09 PM | Link to this
Are you better off now than you were 100 days ago?
By Q
March 3, 2009 5:14 PM | Link to this
This is for Melody Dareling:
You see how easily you deceive. You may pay state and county sales tax, but it is taxes that you have collected from the consumer during the sale. As a matter of fact, with the state of georgia, you get a tax break on the sales taxes that you collected if you file before the deadline…therefore, you actually make money off of your sales taxes.
If the cost of sales tax (state or local) comes out of your revenue, then you need to change accountants.
It amazes me how people who know are so willing to keep out most of the details…just to get their ‘point’ (however flawed) accross.
I used to be a sales tax accountant who was responsible for paying sales taxes back to the 30 states in which the company that I worked for did business in.
By Dusty
March 3, 2009 5:14 PM | Link to this
Deegee, 5:05
That’s a SMACKDOWN? Maybe Bush could figure out things a little faster and needn’t need to hear everybody’s idea? But then again Obama doesn’t have much experience in leading a discussion. Bush had already been a governor and knew how to preside.
By Dusty
March 3, 2009 5:17 PM | Link to this
Chris Broe
BETTER OFF NOW? R U kidding?
By Q
March 3, 2009 5:17 PM | Link to this
This is for Melody Dareling:
You see how easily you deceive. You may pay state and county sales tax, but it is taxes that you have collected from the consumer during the sale. As a matter of fact, with the state of georgia, you get a tax break on the sales taxes that you collected if you file before the deadline…therefore, you actually make money off of your sales taxes.
If the cost of sales tax (state or local) comes out of your revenue, then you need to change accountants.
It amazes me how people who know are so willing to keep out most of the details…just to get their ‘point’ (however flawed) accross.
I used to be a sales tax accountant who was responsible for paying sales taxes back to the 30 states in which the company that I worked for did business in.
By Will
March 4, 2009 8:40 AM | Link to this
Will the last republican forced to appear and apologize to the leader and spokesman for the party, Rush Limbaugh, please turn out the lights.
By Melody Dareing
March 4, 2009 11:55 AM | Link to this
To Q: You are correct in legal terms…we do collect the sales taxes in our sale. HOWEVER, take this into consideration as a point of practicality…we have many other taxes to pay as well which do come out of our profit AND we can’t just arbitrarily raise our prices because our business is highly competitive. In fact, in this economy, we’ve had to offer deals and lower prices to get ANY business. Plus, a look at reality back a few years ago: Let’s say we get a $2,000 job. Around 50 percent is cost. Tack on 7 percent sales tax…That leaves $860 for the week…then we get a $2500 attorney bill which MUST be paid because we are going to court next week and he won’t represent us unless we pay it. We MUST order our product by Friday for our next job, with cash, even though the bank is holding the next check for three to four days and that money won’t be released until Monday. What do we pay first? Are we really making money on collecting taxes? It’s really easy for someone to sit at a desk and say, in theory, that I am being deceptive and somehow we have a stash of money somewhere. You haven’t lived it. This is the hard, cold reality of owning a business. Every small business owner I know has much the same story. My original point is this, since you so obviously missed it: Small business owners (I define that by those making a total revenue of less than $500,000 a year although the government defines it differently) are treated as if they are mega corporations in terms of regulations and taxation. Those starting out are treated by government entities as if they have been in business for 10 years and are making money hands over fist. I believe that is why so many do go out of business in the first year, by government strangling and everyone cheating them. (Most go into business thinking most people—-like vendors, advertisers and banks—-are honest and are trying to help them when they are really trying to make a quick buck for nothing. It is ruthless and the current atmosphere has driven many businesses underground. That is the TRUTH whethr you want to believe it or not.
By Claire
March 4, 2009 3:34 PM | Link to this
You mean my brother who buys a new car every couple of years would have to pay the tax every couple of years? Ask that question of that rep in the General Assembly.