Tax Policy and Tax Reform in Georgia

The Ways and Means Committee is the chief tax writing committee in the General Assembly and derives its' importance from the state Constitution that provides all revenue bills must originate in the House. The committee considers not only taxes (income, sales, ad valorem, excise, motor fuel, estate, and others), but exemptions and credits as well. I currently serve as Secretary to the full Committee and Chair of the Ad Valorem Tax Subcommittee.

Representative Jay Powell is Chairman of the Ways and Means Committee and he has charged members with considering appropriate tax policy to apply to tax reform efforts in Georgia. I shared with Chairman Powell the following thoughts on the direction I would like to see tax policy and tax reform move in Georgia.:

• No rate increase on any non-excise tax revenue source
• No increase in the sales tax rate
• Reduce personal income tax rates
• Eliminate corporate income taxes
• No tax on business inputs
• Broaden the sales tax base
• Provides opportunities for increased revenue at current rates
• Reduce the number of income tax brackets
• Adjust 'sin' taxes to the average of all states or the average of border states
• Would result in a reduction in some tax rates and an increase in others ultimately resulting in a neutral tax policy for Georgia as compared to other states with regard to 'sin' taxes.
• No fees on property tax bills
• Generates an estimated $6 - $8 million in revenue to the state and acts as a 'governor' on local governments raising taxes and fees.
• No new local sales taxes and/or increases in existing caps
• Eliminate certain credits / exemptions - based on return on investment analysis; will result in revenue
• Sunset all credits / exemptions - likely will result in revenue over time
• New credits by refund ONLY once documented achieving goals - likely to result in revenue over time
• Policy should benefit maximum number of taxpayers possible
• Policy does NOT incentivize government assistance
• Policy does NOT drive market behavior and/or create new private sector profit opportunities
• i.e.: marketable tax credits
• Recognize our bond rating is the result of sound fiscal policy and should not dictate policy

Obviously, there are many more considerations and the devil is in the details of any piece of legislation, however, these are the broad concepts I believe would serve Georgians well with regard to our tax policy and tax reform. 

I welcome your comments.

County fees exceed county property taxes

I suspected it was only a matter of time and that time is 2013. The weight of the Gwinnett County fees levied against some properties exceed actual property taxes this year. That is right, county property taxes are actually less than the tack-on fees the county assesses against some properties. Of course, one’s wallet and one’s mortgage company cannot tell the difference between a tax and a fee – except that taxes are deductible and fees are not.

Many of you support my effort to remove tack-on fees from our property tax bills (HB 159); the inclusion of fees on our property tax bills is poor public policy period. Economically, the practice tends to hit lower valued properties, perhaps those often at risk of default, the hardest. Non-tax fees consume a higher percentage of the total bill on lower valued properties than high value properties. By increasing monthly mortgage payments via escrow and because of the non-judicial foreclosure statutes in Georgia, including these tack-on fees on property tax bills severely limits a property owner’s ability to stall or avoid foreclosure via negotiations with vendors providing these services.

The result? Freedom is reduced; government grows stronger.

I will continue making the case to remove these add-on fees from your property tax bills. In the meantime, you might support city and county candidates that are willing to do the same.