Newspaper article The Florida Times Union

GOP Bill Would Trim Income Tax Rates; but Critics Don't like That Proposal Would Also Increase Sales Tax

Newspaper article The Florida Times Union

GOP Bill Would Trim Income Tax Rates; but Critics Don't like That Proposal Would Also Increase Sales Tax

Article excerpt

Byline: Walter C. Jones

ATLANTA | Republican legislative leaders feel they have a surefire way to stimulate job creation: tax reform.

They've introduced a bill that will lower the rate on income taxes for individuals and businesses that their economists estimate will result in 14,000 or so jobs. To keep paying for government services, they are raising the sales tax and expanding it to groceries and digital downloads like songs, video games and movies while also closing some business tax breaks and hiking the cigarette tax.

Critics say low-income people will be harmed by it. Supporters counter that the resulting jobs are more than make up for a slight tax increase on some low-income people.

"Ultimately, this bill answers the need for an updated tax system that is flatter, fairer, and puts our families first," said Rep. John Carson, R-Marietta, author of House Bill 445, nicknamed the More Take Home Pay Act.

He estimates that a household earning the state's median income of $48,000 would have $400 more in take-home pay yearly.

The bill is a revived effort at similar tax changes that bogged down in 2011 despite being based on recommendations from an independent commission of economists and business executives. Christine Ries, chairwoman of the economics department at Georgia Institute of Technology, served on the commission and has reviewed HB 445. Her computer models - and the three others she's compared it to - came up with the employment and income projections.

"The way I look at it, realistically, those jobs that are created are about $30,000 jobs. ... So they'll pay a small amount of income tax, but they'll have a job," she said.

The higher sales tax that would include groceries would boost monthly tax burden on low-income Georgians by about $50, she estimates, except for those on food stamps, which aren't subject to sales tax.

Democrats have railed against the food aspect of the proposal last time and have begun raising the same objections this year.

"Most families that are already struggling to put food on the table will not be the recipients of any of the proposed tax incentives, but they sure will feel the hit at the checkout line at the grocery store," said DuBose Porter, chairman of the Democratic Party of Georgia.

Democratic Rep. David Wilkerson of Austell, a certified public accountant, said his well-heeled clients are more concerned about education, transportation and quality of life than with getting a tax break.

"Cutting taxes on wealthier individuals while taxing lower-income people, it would be hard for me to go back to my constituents," he said.

Beyond philosophy, there is debate over what the bill's results would be.

Ries said the states with no income tax or with lower rates are growing faster than those with higher rates. …

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