Tax reform that reduces or eliminates the state income tax will be a priority in the 2014 Georgia General Assembly, House Speaker David Ralston told the AJC editorial board this week.
With Senate leaders making similar pledges, and with Republicans firmly in charge of the House, the Senate and the governor’s office, we have a pretty good idea of what that “reform” will look like. It will cut taxes significantly on the wealthy and on corporations, and it will shift that expense onto the rest of us, sweetened with an admonition not to worry, it’ll all trickle down in good time.
The proposal will raise the sales tax, and will probably expand the number of items that the sales tax is levied upon. It will at least attempt to reinstitute the sales tax on food, because taxing food would produce significant new revenue, which in turn will finance significant tax cuts for those at the upper end of the income scale.
How do we know all that? Because the Georgia initiative is part of a state-by-state effort driven and coordinated by national, corporate-financed conservative groups such as Americans for Prosperity and the American Legislative Exchange Council. In state after state — Ohio, Louisiana, Oklahoma and right now in North Carolina — they have pushed legislation that follows that same general model. The goal of the initiative has been to pit state legislatures against each other in a race to see who can cut taxes on the wealthy by the most, with the supposed reward being economic development.
But here’s the thing: It’s a race that no state can win.
Let’s do a little thought experiment: Imagine a state that has already won the race described above. Imagine a state that already ranks 50th in the country in per capita tax burden. No state has lower taxes. Imagine that in this fictitious state, the tax burden has already been skewed heavily toward those at the lower end of the economic scale, with the bottom 40 percent of its citizens paying twice as much of their income in state taxes as the richest 1 percent.
According to rankings by the conservative Tax Foundation, that state exists. It is called Georgia. In terms of low taxes, we are already what other states aspire to be. Yet it hasn’t exactly turned us into an economic dynamo.
Tragically, many of the votes likely to be cast in favor of next year’s “reform” will come from legislators who represent small towns and rural parts of the state, places where the economy is struggling and where state cutbacks have made it all but impossible to provide an education that will allow their children to be competitive in a 21st century economy.
Those legislators will blind themselves to the obvious reality that the bill they vote to pass will add significantly to the tax burden of most of their constituents, draining resources from their communities, while it significantly lowers the tax burdens of affluent Georgians in the thriving metro Atlanta suburbs. These reforms won’t just shift the tax burden from the rich to the less well-off. It will shift the tax burden geographically as well.
Next year’s push ought to represent a grand opportunity for the state’s Democrats, who badly need a message that allows them to reach constituencies that long ago stopped listening to them. While it’s too early to know exactly what form next year’s legislation will take, given its broad parameters, we know with near certainty that a relative handful will benefit greatly, and the vast majority will see substantial tax increases. At the very least, Republicans ought to be forced to explain and defend that, often and loudly.
