House blesses tax bill, but critics slam process, consequences

A massive tax plan that would affect nearly every Georgian cruised through the state House on Tuesday, 30 hours after it was introduced, despite criticisms directed at the process, pieces of the plan and its long-term effects.

Republicans and Democrats strongly supported House Bill 386, saying it would bring Georgia new jobs, protect the ones already here and give families tax breaks. It passed 155-9. The Senate could vote on the bill Thursday.

Concerns about the plan have begun surfacing.

"We are not sure why it's moving this quickly," said Shannon Brown of Hazelhurst, a member of the Georgia Coalition of Conservative Leaders, which includes 31 subgroups.

"If you are going to represent the people of Georgia, you have to understand exactly what's in this bill," Brown said. "And you can't do that in this short a time."

The bill is a priority of Gov. Nathan Deal and could make good on several campaign promises.

“This pro-jobs, pro-family tax reform broadens the tax base so we can lower the tax burden overall," Deal spokesman Brian Robinson said. "It’s important to remember ... that this is an overall tax cut. We can’t get away from that fact."

Leaders on the legislation countered assertions that the plan was moving too quickly, saying nearly everything in it had been debated for months.

House Speaker David Ralston, R-Blue Ridge, said most of the ideas in the plan have been discussed by legislators, citizens and a blue-ribbon tax council, but not packaged in a single bill.

"People who complain about the process in this bill simply had not read it and had not done their homework," he said.

A key element of the tax plan would be a sales tax on some Internet purchases that would produce $81 million in state and local revenue over three years.

The bill would also cap income tax exclusions for seniors and do away with some tax exemptions for property in conservation easements. And it would change taxes on car purchases from dealers and between individuals.

New breaks could give married couples a bigger exemption on state income taxes and provide hundreds of millions of dollars in tax exemptions on equipment and energy for manufacturers and agribusiness, which supporters say would help lure businesses and jobs to Georgia. It could re-establish sales tax holidays for school shopping and energy-efficient appliances.

House Republicans mentioned twice during the debate Tuesday that Grover Norquist, an influential conservative voice on tax issues, said the bill does not violate his principles against new taxes, but they failed to mention he also found fault in the legislation.

Josh Culling, the state affairs manager at Norquist's Americans for Tax Reform in Washington, told The Atlanta Journal-Constitution that Georgia's legislation was "disappointing"

Culling called the plan "a net tax cut," but he disagreed with people who call it tax reform.

"Tax reform is about lowering marginal rates and broadening the base," he said. "This does nothing to marginal rates."

Culling called the Internet sales tax "stupid."

Alan Essig, a former state budget analyst who runs the Georgia Budget and Policy Institute, said his group has not had enough time to fully analyze the plan because it is moving so fast and “there are lots of moving parts."

But he added, “It is not the comprehensive tax reform we have been talking about the past two years.”

Robinson responded to criticism of the Internet sales tax by saying it "levels the playing field" for Georgia retailers who must now collect sales taxes from customers. Many online retailers who don't have a physical presence in the state, such as eBay and Amazon, don't have to collect Georgia sales taxes.

Minority Leader Stacey Abrams praised the Internet sales tax.

"Whether you have a street address or an IP address," she said, "if you sell to Georgians, you should pay in Georgia."

Amazon has opposed the bill and others like it in other states. The Web-based retail giant says the bill is unconstitutional based on previous Supreme Court rulings. But the Georgia Retail Association said the Georgia bill makes all retailers equal in the eyes of the law.

"The store people do the job for the citizens by collecting it, remitting it," association President Rick McAllister said, "and online [retailers] don't and they use that as a competitive advantage and it's just wrong."

The exemptions and tax breaks would create gaps in the state budget. The bottom line shows a $19 billion budget with a projected $53 million shortfall in 2013.

Sen. Don Balfour, R-Snellville, who presented the bill in a committee Monday, said it would not be difficult to make necessary adjustments.

Julianne Thompson, an organizer for the Atlanta Tea Party Patriots, was at the Capitol on Tuesday and said the Internet sales tax component is problematic. It should be a stand-alone bill, she said.

But beyond that, Thompson is most troubled by the way in which Republican leaders have handled the bill. She compared House leaders to Nancy Pelosi, the former Democratic U.S. House speaker who angered many conservatives by pushing complex legislation quickly.

"This is very Pelosi-like," Thompson said, "It's ‘Let's pass it and then see what's in it.' "