“Our charge was to examine the tax code of Georgia, review it for fairness, and then recommend a new structure that would be as growth-friendly and as job-friendly as we could make it.”
— A.D. Frazier, chair, 2010 Special Council on Tax Reform and Fairness for Georgians
This state’s politicians are now learning it’s best to not ask a hard question of an honest broker if you don’t really want to hear the answer.
When elected officials set up the tax council, they urged its members to produce a wide-ranging, fair plan to drag the state’s outdated taxing apparatus into alignment with a 21st-century economy.
The council obliged, and the Legislature collectively gulped when they saw the result. That led to, first, inaction, followed by a late push to do, well, something. Given the political wrestling match over taxation that broke out last week, and with just three legislative days remaining, the General Assembly should scrap their scramble to pass a hacked-down snippet of tax change. Georgians deserved better, but we won’t get it in the time remaining this year.
This important work certainly should not be heaved into the Gold Dome’s attic and forgotten. Crafting a better tax code is too critical to our future for that to happen.
The bill now being haggled over doesn’t come close to doing that. It combines a cut in the personal income tax rate with a couple of tax exemptions sought by business interests. Unraveling a patchwork quilt of special-interest exemptions was a key tenet of reform — a point seemingly forgotten by legislators. Exemptions and tax cuts only make sense if the tax burden is spread more broadly. Adding a few isolated sales or service taxes doesn’t bring Georgia anywhere near that goal.
So lawmakers should try again and resolve to quickly consider this matter — for real this time — in the first few days after they go back to work next January.
The end result should be an overhauled tax code that’s flatter, simpler, more equitably applied and more conducive to attracting investment and jobs here.
Doing so is not possible this year; certainly not through a late-session push on the reform-lite bill that has quickly come under criticism by groups as varied as the Democratic caucus, the Georgia Baptist Convention and tea party elements.
The resulting heat wave produced a predictable result last week — a past-11th-hour scramble to alter tax details yet again to produce a politically acceptable bill.
Tinkering with numbers to gain support may be good politics, but it’s a lot less likely to produce optimal results in either adequately funding basic state obligations or aiding growth in private-sector jobs.
That broad-ranging tax change did not happen does not mesh favorably with politicians’ oft-repeated promises to improve Georgia’s already solid standing as a business-friendly, jobs-luring state.
The best changes will come only after legislators commit to following through on advice laid out by tax council chair A.D. Frazier in his letter introducing the report. “We ask that the Legislature give a fair hearing to our recommendations and consider them as an integrated set of policy recommendations as they deal with the challenging economic environment in Georgia,” Frazier wrote.
Cutting-and-pasting politically palatable elements into a mishmash of a bill doesn’t fulfill Frazier’s earnest request. Honest consideration of the panel’s overall work is a key part of accelerating Georgia’s progress out of this recession.
That’s not to say that every point in the council’s report should become law, but the basic concept contained therein is a sound one — leveling out and expanding the tax base and applying it more equally to more people.
The council’s report provided a thorough, strategic look at taxation. The serious work by these noted business leaders and academic experts deserves an adequate vetting by the Legislature. Lawmakers should belatedly deliver on true, business-building tax reforms.
Georgia’s taxpayers deserve that outcome — and it should happen no later than 2012. We can’t afford any more delays.
Andre Jackson, for the Editorial Board
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