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Deal says yes to Georgia income tax cut, no to Delta, for now

Gov. Nathan Deal promised Wednesday to sign a historic tax cut bill, even though state Senate leaders stripped his break on jet fuel because Delta Air Lines ended discounts for National Rife Association members.

But in making the announcement, the governor had a message for lawmakers who’d fanned the fiery Delta vs. NRA debate: Ditch the election-year “antics.”

“We were not elected to give the late-night talk show hosts fodder for their monologues or to act with the type of immaturity that has caused so many in our society to have a cynical view of politics,” Deal said.

The governor made his announcement at a Capitol press conference about four hours after the Senate Rules Committee removed the tax break on jet fuel — worth more than $40 million a year to Delta and millions more to other airlines — from House Bill 918.

With the jet fuel provisions gone, the bill, which would cut state income tax rates, should sail through the General Assembly on its way to his desk. The Senate is scheduled to vote on it Thursday.

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The governor told reporters he would continue to fight to eliminate jet fuel taxes on airlines and cargo companies.

“Disagreement on key issues of our time should not prevent Georgians from keeping more of their hard-earned dollars,” Deal said.

The bid to punish the state’s largest private employer came as Georgia is pushing to recruit Amazon, which is considering Atlanta and 19 other finalists for its second headquarters. Deal conceded that the flap with the airline was not helpful, but he said he was confident that the tech giant would factor the state’s “good business climate” above all.

HB 918 would wipe out a potential state income tax windfall caused by federal tax changes that Congress approved in December and cut taxes on Georgians by an additional $516 million over the next half-decade.

It would cut the top state income tax rate — the rate most Georgians pay on a majority of their income — from 6 percent to 5.5 percent over two years.

In addition, the proposal would double the standard deduction for Georgians. For married couples filing joint returns, the deduction would go from $3,000 to $6,000.

Its Republican sponsors said the cuts were sorely needed because tax rates hadn’t changed in several decades.

But Deal was initially reluctant to reduce the income tax rates, saying he wanted to wait a year until the state is more certain of the impact of federal tax changes. He changed his mind after lawmakers — most of whom are either running for higher office or seeking re-election this year — began calling for tax cuts.

With party primaries only a few months away, Republican leaders were anxious to be able to brag on the campaign trail about cutting taxes, and last week, most voiced support for the tax break on jet fuel.

But that changed over the weekend when Delta — which would be the biggest beneficiary of a tax break on jet fuel — announced it was ending discounted rates for NRA members after the mass shooting Feb. 14 at a Florida high school.

Within two days after Delta’s announcement, Lt. Gov. Casey Cagle, the Senate’s president and a leading Republican candidate for governor, vowed to strip the jet fuel provision  unless the Atlanta-based airline restored ties with the NRA.

Delta’s move infuriated some conservatives and prompted each of the leading Republican candidates for governor to oppose the tax exemption for jet fuel.

Deal and other supporters of the tax break, which the House approved last week, sought to salvage a deal. The governor warned Senate Republicans this week that refusing to pass the measure could make it more difficult for Atlanta to compete with other cities with air hubs that don’t charge the tax.

But Cagle and other GOP lawmakers weren’t going to budge. Describing the feud as a “squabble” with a treasured family member, Cagle told “Fox & Friends” on Wednesday that the airline wouldn’t be targeted by Republicans if it treated all businesses “fairly.”

“But instead, they chose to single out the NRA and their membership — law-abiding gun owners. And I don’t think that’s right,” he said. “I have to govern on principles, and obviously, they have a choice to make.”

For Cagle and the other Republican gubernatorial candidates, taking the NRA’s side over Delta’s wasn’t a tough call.

While Delta is typically a leading political donor — it has given more than $20,000 to Cagle campaigns over the years — the NRA has been almost sacrosanct among many Republican voters.

Republican gubernatorial candidates in Georgia frequently post pictures and run ads showing themselves holding guns and wearing hunting gear, sometimes throwing in their dogs for good measure.

Full-throated support for the Second Amendment’s right to bear arms is mandatory on the campaign trail, and many in the Republican base see the NRA as protectors of that right.

Before Cagle announced his opposition, he was under pressure from conservatives to reject the Delta tax break. State Sen. Michael Williams, who worked to block a vote on the tax plan in the Senate last week, said he was grateful for Cagle’s support.

“I’m excited that the lieutenant governor felt the pressure of the movement,” said Williams, also a GOP candidate for the state’s top job. “And I’m excited for the citizens of Georgia to get a tax break without the Delta incentive being held over their head.”

The NRA also praised Cagle for his efforts.

“This is what true leadership looks like,” the NRA tweeted Wednesday evening. “Thank you Lt. Governor Casey Cagle for standing up for NRA’s 5 million members.”

Even staunch backers privately said there was little chance of salvaging the break on jet fuel.

The House overwhelmingly approved the tax bill last week — before Delta cut ties with the NRA — and House Speaker David Ralston said he was still smarting over that stance.

“The timing of the decision by Delta couldn’t have been worse,” Ralston said.

He added: “I was hoping there would be a compromise, which is why we suggested putting the milk back in the bottle and start over. I don’t know that that’s going to happen.”

While bemoaning the role election-year politics played in the tax fight, the governor said the mess could have been avoided.

“Delta made a statement that caused this dispute to erupt,” Deal said. “There are a lot of people who share the blame for what happened here. I am not putting the blame just on those who have been outspoken on the issue.”

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