Posted: 5:06 pm Tuesday, June 10th, 2014

A quiet beginning to the campaign for a cap on state income tax rate 

By Jim Galloway

Come the November general election, voters will be asked to answer this question:

Shall the Constitution of Georgia be amended to prohibit the General Assembly from increasing the maximum state income tax rate?”

The campaign for this proposed constitutional amendment quietly began today, with a press release from the bill’s sponsor, Senate President pro tem David Shafer, listing 17 Georgia economists who have endorsed the measure. They include:

– Paul H. Rubin, Samuel Candler Dobbs professor of economics. Emory University;

– Jeffrey H. Dorfman, professor of agricultural and applied economics, University of Georgia;

– Donald Ratajczak, Regents professor emeritus of economics, Georgia State University;

– W. Ken Farr, chair of the Department of Economics and Finance, Georgia College & State University;

– E. F. Stephenson, professor of economics, chair of the Department of Economics, Berry College;

– Rand W. Ressler, professor of economics, chair of the Department of Finance and Economics, Georgia Southern University;

– Michael Daniels, professor of economics, Columbus State University;

– Govind Hariharan, professor of economics, finance and quantitative analysis, Kennesaw State University;

– Christine P. Ries, professor of economics, Georgia Institute of Technology;

– Donald Sabbarese, professor of economics, finance and quantitative analysis, director of the Econometric Center, Kennesaw State University;

– Tyler T. Yu, associate dean of the School of Business, professor of economics and accounting, Georgia Gwinnett College;

– David B. Mustard, Josiah Meigs distinguished professor of economics, University of Georgia;
– Dwight R. Lee, professor emeritus of economics, University of Georgia;

– Benjamin Scafidi, professor of economics, Georgia College & State University;

– Bill Yang, professor of economics, Georgia Southern University;

– Christopher Clark, associate professor of economics, Georgia College & State University;

– and Brooke Conaway, assistant professor of economics, Georgia College & State University.

Said Shafer, via email:

“The most brilliant economists in the state are validating what we instinctively know to be true — that the certainty of low taxes on income will spur the creation of jobs and help put Georgians back to work.”

Note that there is no mention, on anyone’s part, of replacing the income tax with a sales tax. This is about a cap, and nothing else.

SR 415 won two-thirds approval in the House along a party-line vote, but received a larger margin in the Senate. Some Democrats, but not all, voted for it – but not all. Jason Carter of Atlanta, the Democratic nominee, is recorded as not voting.

52 comments
SouthGeorgiareader
SouthGeorgiareader

The assertion that passage of this amendment question will result in job growth is a myth---if it passes, a sales tax increase is a sure thing.  The powerful want to protect their income while draining the middle class and poor by increasing sales taxes.

AuntieChrist
AuntieChrist

You gotta give the puppies credit for thinking ahead. This proposal, along with putting Medicaid spending under the purview of the legislator rather than the gubner, demonstrates their realization that the days of regressive repuppy rule are soon coming to an end.

And I have to laugh at shafer's idiotic comment regarding the amendment: the certainty of low taxes on income will spur the creation of jobs and help put Georgians back to work.”

The top rate in Jawja has been 6% for as long as I can remember, with no proposals put forth to increase it in my lifetime. But according to shafer, job creators were just waiting for some assurance that tax rates that haven't changed in 50 years, aren't going to change in the near future, so now thousands of Jawjans will be put back to work! That is about as believable as his saying now that they know a large asteroid won't be hitting the planet within the next 10 years, they will finally get Jawjans back to work. 

EdUktr
EdUktr

An 11Alive poll done last week has Gov. Deal ahead by six points -- and Jason Carter doesn't think it behooves him to make hard choices on legislative votes?

ref: http://tinyurl.com/ouq4e3d

Astropig
Astropig

Jason Carter, the Democratic nominee is recorded as not voting.


Yep, he sure stood up for people like Honest Ed there, didn't he? He fought the good fight from the comfort of some lobbyists office and really fought hard for the poorest Georgians.


Great candidate you got there.

findog
findog

if the most brilliant economists could only identify the replacement funds

once cut, a tax can never be restored

once we hand out breaks for businesses, they can never be reversed

lets set all taxes to zero, and make it up on volume

NWGAL
NWGAL

Tax the poor to feed the rich. Great plan.

DS
DS

This is strange. Economists don't advocate placing prohibitions on the ability of a legislature, or any duly-elected government body, from changing government financing arrangements. That's what governments do in a representative democracy: react to the needs and wishes of the general population through their elected representatives.

You might argue about what those arrangements should be, but it makes no sense to prohibit changes. That has all the makings of a totalitarian dictator state, not a representative democracy.

This doesn't sound right. I would appreciate it if an enterprising reporter would chase down some of these endorsers and ask them to explain.

honested
honested

Of course the 'usual suspects' support this hare-brained idea.


How about the REAL economists (ratajczak used to be one then he sold out).

NWGAL
NWGAL

Yes, let's definitely protect those making the most money. They have been so vulnerable this past decade, Some of them are debating on whether to buy a fifth summer house or a Senator.

The_Centrist
The_Centrist

It's going to continue to be a quiet campaign since it is so popular.  It certainly doesn't mean income tax receipts will stagnate - they will continue to rise and fall with economic conditions without the threat of government attempting to expand faster via the income tax.  Other taxes may increase without a cap like property/ milleage rates, sales tax percentage and more SPLOSTS, Community Improvement District (CID) , business, fuel, utility, alcohol, tobacco, document taxes on top of various "fees" (another form of taxation).

There will be future pushes to replace all or part of the income tax with a sales (consumption) tax that will catch the untaxed undergroung economy and income tax cheats.

Derwin0
Derwin0

@SouthGeorgiareader Why is a sales tax increase a sure thing?  Georgia's income tax has been at 6% for a long time.  


State sales tax has also been at 4% for a while as well, since it was raised from 3% to balance removing food from the sales tax.

Derwin0
Derwin0

@AuntieChrist Medicaid spending was under the purview of the legislator anyway.  Constitutionally the Governor can't increase spending anyway, it would require an act passed by the General Assembly signed by the governor.  A Federal law cannot require a State to increase it's spending in violation of that States laws, such a law would violate the Constitution (that's why the Supreme Court blocked that portion of the law in the first place). 

The new law really doesn't change that fact.  If Carter did win and had signed the expansion, the State courts would have tossed it out.

honested
honested

@EdUktr 

How about the poll at the Albany local paper.

You can pull a poll a day (from wherever you pull them) and it won't change a vote in November now will it?

The_Centrist
The_Centrist

@EdUktr - Really?  There was a recent poll?  Didn't see Galloway, Bluestein, or Malloy post that in this Politicrat Insider blog.

honested
honested

@Astropig 

Whatever it takes, pig, a didn't vote carries the same weight as a no vote for me!

When the 'amendment fails', I'm hoping for a 12% top bracket!!

AuntieChrist
AuntieChrist

@Astropig  The poorest Georgians do not pay the top rate of 6%. They probably pay less than 3%, so how is that Jason's non-vote affected the poorest of Georgians? 

As long as we have repuppies running the state, with their sweetheart deals for wally worlds and $6-8/hr mcjob creators, the poor are not likely to get out of those brackets either.

The_Centrist
The_Centrist

@Astropig - Give the guy a break.  He's trying to be a moderate Democrat, but not rile up the extreme left who seem to live here.  Just like Nunn.  Republicans like Perdue try to do the same thing with their extreme wing.  Maybe even Kingston.  It was Broun, Handel, and Gingrey who were so aligned with the far right, and thankfully rejected.

The_Centrist
The_Centrist

@NWGAL - Ridiculous.  Percentage increases effect everyone as well as caps, so it does not "protect" the rich any more than any other income group.  There is no proposal even from liberals for higher progressive tax brackets like the federal government.  6% will be the cap.

honested
honested

@The_Centrist 

Various 'fees' (that charge those at the bottom at the same rate as those at the top).

Taxing poverty will bankrupt the state, as will fear of taxing wealth.


I will believe in 'shifting to consumption tax' as soon as everything (including real estate transfers and stock sales) are taxed.

JAWJA
JAWJA

@The_Centrist 'Splost, sales, fuel, utility = Tax the poor and middle class, who can least afford it. God forbid we tax those who can afford it.

EdUktr
EdUktr

@honested @EdUktr

Hey, if you have a fresh poll showing Carter or Nunn ahead ... I'll be glad to look! And Jim will bless you for it.

AuntieChrist
AuntieChrist

@The_Centrist @EdUktr   I think a strongly worded letter is in order, right to the President of the Internet Bloggers Association for Political Content.  The authors of Political Insider know that the association's by-laws require them to publish each and every dog crap poll that is taken, especially those by telephone landline to a group of 75 year olds.

You might also want to mention some of the other grievances you have expressed over the years, like not writing on topics you want them to, their left wing tactics of making repuppies look bad, by quoting their outrageously stupid remarks verbatim, etc..

Your vast influence will go a long way to having sanctions brought against Galloway et al.  Chop chop, times a'wasting!

Kamchak
Kamchak

@AuntieChrist 

As long as we have repuppies running the state, with their sweetheart deals for wally worlds and $6-8/hr mcjob creators, the poor are not likely to get out of those brackets either. 

That's not a bug, it's a feature.

honested
honested

@AuntieChrist @Astropig 

Auntie, 

Since you mentioned them.

Wont the new WM commercial be (like the ones for the delivery truck drivers now)

"Im Tracy Morgan, and I own walmart now".

DS
DS

@The_Centrist I think findog is explaining that, the way the proposed amendment is worded, taxes could go down, but never up.

For example, if the maximum rate is set at 6%, the General Assembly cannot vote on legislation to raise it to 8%. But they could vote on legislation to lower the maximum rate to 4%.

Once the maximum rate is lowered to 4%, it could not be raised back to 6% because of the proposed amendment. It can only go down, never back up.

honested
honested

@The_Centrist @findog 

How about the unConstitutional exemption for utilities?

Or the failure to keep motor fuel usage taxes equal to need?

This 'amendment' demonstrates the epitome of republican cowardice.

findog
findog

@The_Centrist @findog where? have they restored any temp tax cuts?  did they reverse the delta fuel tax giveaway? capping taxes, or hand cuffing legislature from doing their job should be unconstitutional

The-Centrist
The-Centrist

There is no proposal

So why the need for a constitutional amendment?

Legislators should make the laws, and then face their constituents - not hide behind a constitutional amendment.

honested
honested

@The_Centrist @NWGAL 

There may be no proposals today, but when this idiotic measure fails and eventually Georgians realize what is being done to them, there WILL be progressive income tax in Georgia.

The_Centrist
The_Centrist

EVERYTHING does not yet get means tested - we have so far averted communism.

But those who "can least afford" paying some tax are doing so with many layers of transfer payments from income taxpayers - you know only half the adult population.

honested
honested

@AuntieChrist @The_Centrist @EdUktr 

Yep, he and his friends will threaten to cancel their subscriptions and get all the fauxclones to go along.

The effect on subscriptions will be underwhelming.

Derwin0
Derwin0

Flexibility is still there, can always pass another amendment, it's just harder to do.  

Big Ben
Big Ben

Not true, DS, the maximum rate could be lowered and then raised again so long as it does not exceed the maximum rate in effect on January 1, 2015, presumably 6%:

http://www.legis.ga.gov/Legislation/20132014/144989.pdf

But why would we want to raise the rate when we already have the highest rate in the Southeast? Legislators should eliminate special interest exemptions and lower tax rates across the board.

The_Centrist
The_Centrist

@DS - Might be right.  The state income tax is probably going to be phased out and replaced by a consumption sales tax to capture the untaxed underground economy and tax cheats.  Like so many other States are doing.

The_Centrist
The_Centrist

@RoadScholar - It is tiered.  Up to $10,000 taxable.  I guess what you are advocating is more and higher tiers.  Never seen that proposed, probably because it has no chance - especially now that there will be a constitutional amendment to cap it.

http://www.tax-rates.org/georgia/income-tax

DS
DS

@The-Centrist Exactly---I think you nailed it.

The state government should retain the flexibility to change financing arrangements as needed. Voters will keep the arrangements in line.

The only way this amendment makes sense is if you believe that the General Assembly will run amok and do something that voters don't approve of, but somehow won't be turned out at the next election. 

In other words, if you don't trust democracy.

The_Centrist
The_Centrist

This is a screen name stealing, liberal hypocrite sock puppet.  While it shows his/her lack of integrity and ethics, it also shows how far at least this one leftist will go with such "debate" tactics and those who won't condemn them.

Scum.

EdUktr
EdUktr

@honested @AuntieChrist @The_Centrist @EdUktr

Personally, I'll be content with just the coming GOP victories.

DS
DS

@Big Ben Thank you for that link. I agree with the way you've interpreted it.

I don't know why the state would want to raise the rate. They might not. Or they might decide to dredge a port or dig a system of water reservoirs on their own, without any help from the federal government. Who knows?

But why would voters want to give up the flexibility to do whatever might be deemed necessary next year, or five years from now? Politicians will still be held accountable for their actions.

Or don't they trust democracy?

DS
DS

@The_Centrist Hmm, that's interesting. 

A consumption sales tax is regressive, because people with lower incomes spend most of their income on taxable items, whereas the wealthy can afford to save a considerable portion of their income. The poor end up paying a higher tax rate than the wealthy.

In this country, we've long supported a progressive tax, by which the wealthy pay a higher tax rate. After taxes, they still have lots of income left over to invest, consume, or pass on to their heirs.

It sounds like you're suggesting that this proposed amendment is a back-door way to bring Georgia to a regressive consumption tax?

honested
honested

@The_Centrist @DS 

So do you propose a real consumption tax, where EVERY transaction is taxed?

Why is it that consumption taxes always EXEMPT the things that those at the top consume?

honested
honested

@The_Centrist 

So answer the question, why hide behind an unnecessary Constitutional Amendment that impedes the ability of the State to conduct appropriate business?

The_Centrist
The_Centrist

@DS - We currently have an income tax that is only progressive up to $10,000 - then flat at 6% (to be capped) just like sales taxes.  A consumption sales tax can (and should) be structured to exempt most non-discretional necessity spending like groceries, utilities, and housing, mass transportation, etc.  Only discretionary spending would be subject to the sales tax.  I reject your calling it regressive. As previously mentioned, the beauty is that it taxes the unreported underground economy and income tax cheats.

honested
honested

@Big Ben 

I wondered how many full professors that may back the stupid cap.

It didn't take long to look just at Tech, GSU and Emory to find there are a huge number that will likely show up in the Anti-Cap campaign over the next week or so.

DS
DS

@The_Centrist So you think people collect and report sales tax in the underground economy? Really?

The_Centrist
The_Centrist

@DS - People who earn cash income (or non-business checks) are rampant, and many do not report it or underreport it.  But they mostly spend it making it subject to a sales tax.  Scalpers, drug dealers, pan handlers, illegal aliens, construction workers, waiters/waitresses, handymen, painters, plumbers, electricians just to name a few.  Admittedly there is a large constituency that does not want a change that will force them to pay a fair share tax they have been successfully avoiding.

I'm done here - you are throwing up the retreaded bogus arguments.

honested
honested

@The_Centrist 

You left out builders, developers, real estate sales people, and UMC homeowners that hire illegals for the tasks they are 'too important' to perform.