Let’s put this as bluntly as possible:
If they can get away with it, Georgia Republicans intend to significantly raise taxes on lower-income and middle-income Georgians, while at the same time reducing taxes on the wealthy and corporations. They will wriggle and squirm and try to deny that’s their goal, because they understand how unpopular it will be politically. But it’s their goal nonetheless, and they have no legitimate ground on which to claim otherwise.
The so-called “More Take Home Pay Act,” introduced by the House Republican Caucus this week, illustrates that point perfectly. But before we go deeper into that bill, let’s set the background:
1.) Today, middle-income and lower-income Georgians already pay a much higher share of their income in state and local taxes than do Georgians at the upper end of the economic scale. In fact, they pay roughly 10 percent of their income in state and local taxes while those in the top 1 percent pay just 5 percent, according to data released last month by the Institute on Taxation and Economic Policy.
2.) In addition to paying twice as much of their income in state and local taxes, middle-income and lower-income Georgians have been hardest hit by shifts in the economy. Median household income in Georgia has plummeted from $56,680 in 2000 to $47,439 in 2013, a much deeper fall than in most states. That’s an inflation-adjusted loss of more than $9,000, per year, per household, and it has forced a significant decline in living standards and basic economic security.
In such a situation, the last thing that politicians should propose is “tax reform” that will pile still more taxes on Georgians struggling to keep their heads above water, while reducing the tax burden on those doing well. In effect, it would be like kicking people when they’re down and then telling them that it’s for their own good.
Which again brings us to the “Take Home More Pay Act,” the GOP’s latest income-redistribution scheme disguised as “tax reform”. With House Speaker David Ralston and House Majority Leader Larry O’Neal standing at his side, state Rep. John Carson of Marietta introduced the bill by noting that “Georgians want tax reform that puts families first.”
Yet his bill does the opposite. Yes, it cuts the state income tax by roughly a third, from 6 percent to 4 percent. According to House Republicans, that will reduce personal income-tax collections by some $2.5 billion a year. However, the bill compensates for that lost revenue by raising the state sales tax by one percentage point, adding a 5-percent sales tax on milk, eggs and all other groceries and adding a 5-percent sales tax on cable, satellite TV, cellphone service and the purchase of digital downloads such as movies, music, e-books and software.
The wealthy will benefit disproportionately from the reduction in the income tax; lower- and middle-income Georgians will be hit hardest by the increases in the sales tax, particularly on groceries. There is simply no dispute that it redistributes income away from those who most need it.
If Georgia Republicans believe that redistribution will produce long-term economic benefits, they should be willing to make that argument. There's no evidence that they're right, but it’s at least an honest debate.
Denying the disparate impact and trying to sell it as a tax cut for Georgia families is not.
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