Remember when Republicans were against big government? At least that’s what they said. Georgia GOP House Speaker Glenn Richardson is revising our tax system to centralize power into the hands of Big Government. This power grab will be funded by a high sales tax that will drive business out of Georgia, hike up the cost of living, and tax the daylights out of everything that breathes.
This week, I’ll explain how Richardson’s plan hurts taxpayers and local governments. Next week, we’ll look at the effect on Georgia businesses and unemployment.
Richardson calls it the GREAT Plan: Georgia’s Repeal of Every Ad valorem Tax. (The acronym should be GREAVT, but perhaps that sounded too much like grave or gravy.) He says he will make it illegal for counties to tax property, automobiles and boats. He says he will make up for lost county revenue with sales tax. Of course, that’s not mathematically possible without either raising the sales tax rate outright (which he claims he won’t do) or hiding additional sales taxes other places. By focusing on the repeal, Richardson hopes you won’t notice his funny math, and all the tax he’s adding elsewhere.
Richardson wants to expand the sales tax to cover anything that can be bought and sold, including services. Imagine paying sales tax for groceries, prescriptions, yard work, and even doctor visits.
But that’s still not enough revenue. In order to replace $9 billion in property taxes, Richardson must squeeze an extra $1,000 out of every man, woman and child in Georgia. At 4%, each Georgian would have to spend $25,000 in services per year. It just won’t work. Georgians only average $24,000 total spending per person. They can’t spend more on services alone than they spend altogether.
Rest assured, Richardson is not willing to give up one dollar of tax revenue. Georgia’s big government still has the same bills as before, and Richardson claims that local schools and municipalities will not be short-changed by the new system. All of the funds to operate Georgia will still come from taxes – that is, from us taxpayers.
Richardson has creative ways to extract these funds from you: multiple sales tax charges on every item. Currently the consumer pays sales tax just once, when an item is purchased at the store. Under the GREAT big tax, business-to-business transactions and raw materials will also be charged. Although he claims he will hold the line at 4%, the sales tax is much higher than that when you factor in the multiple instances of taxation before a product reaches the end user.
Imagine, for example, a loaf of bread. Under the GREAT big tax, bread and other groceries are no longer exempt from sales tax. Neither are raw materials or freight. The bakery will pay sales tax on the flour, the yeast, the packaging, and also the freight to get those goods to the bakery. Then the retail store will pay sales tax when purchasing the bread from the bakery. The same loaf of bread will get taxed at least three times. With most products, there are even more distribution and manufacturing layers.
All of this additional sales tax ends up tacked onto the final retail price – and taxed again at the checkout. Business-to-business taxes do not escalate in a straight line because of the tax on tax. When a product goes through several steps to reach the consumer (as nearly everything does), a so-called 4% sales tax may cost the consumer 20%.
Still other new taxes are concealed in the loaf of bread. What about the sales tax paid through the marketing firm who wrote the advertising campaign, and the sales tax paid through the newspaper who ran the ad? The store will also pay sales tax through the companies that clean its rugs and trim its lawn. All of these additional taxes end up in the price of a loaf of bread, where they are taxed yet again.
GOP House Speaker Glenn Richardson may not be trying to bankrupt consumers. His real goal is to take the reigns from local government. By eliminating property taxes, the Speaker can micro-manage every county.
Property taxes are paid to the county and used in the county. Property taxes support our local government and our county schools. Under the new plan, counties and municipalities lose the ability to set, collect, and disburse property tax monies. Instead, the lost revenue will be replaced with sales tax collected by the state. And guess who’s holding the purse strings? The Georgia House of Representatives, which Richardson rules with an iron fist.
In other words, Richardson wants to eliminate a tax which is locally controlled and replace it with a tax that he controls. The state gives up nothing, and gains control over everything. Counties, municipalities, and schools will have to go begging to the General Assembly for every dime. The goal of local elections will be finding Richardson cronies who can stay on the volatile Speaker’s sunny side.
The GREAT big sales tax does not eliminate programs like SPLOST which add local sales tax on top of state sales tax. In fact, Richardson wants to expand local option sales tax so that counties can use the money for maintenance and operation. Now, why would counties need operating funds if he were really going to make sure that local governments receive the same funds as before?
It is easy to see what will happen. As local governments and schools cower at Richardson’s feet begging for funds, they will be forced to cover shortfalls. Since property taxes will be illegal, local governments will demand even more local option sales tax on the top of the GREAT big sales tax. By this time consumers may not be able to afford a cup of coffee.
Understandably, local government officials all over Georgia oppose the plan. In fact, many of them dispute the figures. Tom Gehl, spokesman for the Georgia Municipal Association put it like this, “The speaker has a right to his own opinion, but he doesn’t have a right to his own math.”
Citizens should oppose the plan, too. We may not agree with every decision that our local officials make, but we elected them. They work right here in our county, where we can drop in to talk to them about problems, stand up to speak at a local public meeting, and tell our friends to help us boot them out if they do us wrong. That is more difficult to do with state officials who have a broad voter base, work in Atlanta and often operate beneath a veil of secrecy.
State Reps Ron Forster (Catoosa/Whitfield) and Martin Scott (Dade/Walker) seem to be caught in the Speaker’s spell. State Senator Jeff Mullis is more lucid, even citing the local control issue -- yet he also praises Richardson for introducing the proposal.
The GREAT big sales tax is a great big disaster looming in Georgia’s future. It will strip local sovereignty and put entirely too much political power in the hands on one man.
Stay tuned next week to learn how Richardson’s GREAT big tax will result in a mass exodus of Georgia jobs.
Jeannie Babb Taylor
Showing posts with label Jeff Mullis. Show all posts
Showing posts with label Jeff Mullis. Show all posts
Monday, November 5, 2007
Wednesday, April 4, 2007
Celebrate or Apologize?
The Georgia government has been asked to do a very simple thing: To say “I’m sorry.” Nearly 150 years have passed since that dark chapter in Georgia’s history when slaves were bought, sold, worked and bred like livestock. Today such acts are criminal.
It is sad that an apology needs to be requested. Sadder still is the response from some Georgia office holders. Governor Sonny Perdue questioned the legitimacy of apologizing for others, despite his claim that every Georgian regrets the state’s slave-holding past.
The Senate President Pro Tem called such apologies “silly,” even though he recently signed a resolution apologizing for the harm done by Georgia’s eugenics program.
State Senator Jeff Mullis has opposed an apology for slavery on the basis that he did not do anything “personally” and that slavery happened prior to his tenure. What are these men missing? They are not being asked to apologize personally. It is the state being asked to apologize for the terrible mistake of officially sanctioning slavery. Instead of getting on board with the apology, Mullis introduced a bill designating the entire month of April as a time to commemorate Confederate history and honor everyone who fought in favor of the South.
Which is it? Should we celebrate the heroism of our Confederate ancestors, or should we apologize for their grave wrongdoing? The answer is yes to both. If the glory of our Confederate ancestors belongs to us, then their sin is also ours to confess.
My personal heritage seems clear of slave owners, but I still feel regret when I consider the pain wrought by slavery in Georgia. In fact, it is because I love Georgia and embrace my Southern heritage that I do feel sorrow for our past in human trafficking. I’m sorry that the majestic plantations and fertile fields were propped up by forced labor. I’m sorry that men and women were whipped, that children were taken from their parents, and that young girls were impregnated against their will. I’m sorry that the churches, educators, and social customs of that time – both in the North and the South – taught that Europeans were somehow “more evolved” and that subjugation of the darker-skinned was not only acceptable, but actually ordained by God.
Yes, I know that some slave owners were kind to their slaves. Yes, I realize that many black people and white people grew up together as family. The human spirit is amazing, and hope springs eternal – but such miracles can never excuse the moral atrocity of slavery.
Yes, I know that slavery was not the only issue that led to the Civil War. Yes, I am an advocate of states’ rights, like so many readers of this paper. Yes, I am fiercely independent, and I am mistrustful of Big Government. But sometimes even Big Government gets it right. Liberty – not slavery -- is the rightful inheritance of all Americans.
Ironically, the Jeff Mullis bill may be our best shot at making things right. (And I don’t mean by restoring the slave quarters at the Gordon Lee Mansion.) The Georgia legislature has the opportunity to build the apology for slavery right into the Confederate history bill, allowing Georgians to celebrate what is good and reject what is evil in one fell swoop.
By all means, let us remember our Southern heritage. But let us remember it honestly.
-- Jeannie Babb Taylor
March, 2007
It is sad that an apology needs to be requested. Sadder still is the response from some Georgia office holders. Governor Sonny Perdue questioned the legitimacy of apologizing for others, despite his claim that every Georgian regrets the state’s slave-holding past.
The Senate President Pro Tem called such apologies “silly,” even though he recently signed a resolution apologizing for the harm done by Georgia’s eugenics program.
State Senator Jeff Mullis has opposed an apology for slavery on the basis that he did not do anything “personally” and that slavery happened prior to his tenure. What are these men missing? They are not being asked to apologize personally. It is the state being asked to apologize for the terrible mistake of officially sanctioning slavery. Instead of getting on board with the apology, Mullis introduced a bill designating the entire month of April as a time to commemorate Confederate history and honor everyone who fought in favor of the South.
Which is it? Should we celebrate the heroism of our Confederate ancestors, or should we apologize for their grave wrongdoing? The answer is yes to both. If the glory of our Confederate ancestors belongs to us, then their sin is also ours to confess.
My personal heritage seems clear of slave owners, but I still feel regret when I consider the pain wrought by slavery in Georgia. In fact, it is because I love Georgia and embrace my Southern heritage that I do feel sorrow for our past in human trafficking. I’m sorry that the majestic plantations and fertile fields were propped up by forced labor. I’m sorry that men and women were whipped, that children were taken from their parents, and that young girls were impregnated against their will. I’m sorry that the churches, educators, and social customs of that time – both in the North and the South – taught that Europeans were somehow “more evolved” and that subjugation of the darker-skinned was not only acceptable, but actually ordained by God.
Yes, I know that some slave owners were kind to their slaves. Yes, I realize that many black people and white people grew up together as family. The human spirit is amazing, and hope springs eternal – but such miracles can never excuse the moral atrocity of slavery.
Yes, I know that slavery was not the only issue that led to the Civil War. Yes, I am an advocate of states’ rights, like so many readers of this paper. Yes, I am fiercely independent, and I am mistrustful of Big Government. But sometimes even Big Government gets it right. Liberty – not slavery -- is the rightful inheritance of all Americans.
Ironically, the Jeff Mullis bill may be our best shot at making things right. (And I don’t mean by restoring the slave quarters at the Gordon Lee Mansion.) The Georgia legislature has the opportunity to build the apology for slavery right into the Confederate history bill, allowing Georgians to celebrate what is good and reject what is evil in one fell swoop.
By all means, let us remember our Southern heritage. But let us remember it honestly.
-- Jeannie Babb Taylor
March, 2007
Bad for Business
Bad for Business
Georgia Republicans are poised to reject any raise in state minimum wage, claiming that such an increase will hurt small businesses. Yet these same legislators are vying for a hefty increase in the state sales tax – a move that affects local businesses far worse than a minimum wage increase.
Inflation has eroded the real minimum wage to a level 30% below the 1968 minimum wage. Last legislative session 39 states at least entertained raising their minimum wages. Georgia alone attempted to drop the minimum wage. Our state senators passed a bill to cut young workers down to $4.25 an hour for their first 90 days of employment – a move that encourages retailers to install a revolving door of job instability.
Senator Jeff Mullis, who voted in favor of the cut, has recently hedged the issue by claiming he would favor an increase if it could be made “palatable to businesses.” In Georgia, the minimum wage law is already made palatable to businesses by exempting those with fewer than six employees or revenues under $40,000 per year. Georgia minimum wage law does not cover high school or college students, newspaper carriers, domestic employees, farm workers, or anyone who receives tips.
State Representative Ron Forster not only opposes a raise in minimum wage; he would like to eliminate the minimum wage altogether. Like many other Libertarians who call themselves Republicans, Forster claims minimum wage laws hurt small businesses, damage the economy, and cause job loss. This mantra is outdated and demonstrated faulty by years of empirical data. Employment grows 1-2% more quickly in states that have a higher minimum wage. Annual and average payroll growth is also faster in those states. Further, the number of small business establishments grows twice as fast in states with higher minimum wage standards. Businesses absorb wage increases through higher productivity, decreased turn-over costs, lower absenteeism, and improved worker morale. In fact, 75% of business owners in a Gallup survey said they would be unaffected by a minimum wage increase of 10%. Nearly half favored a minimum wage increase.
What happens when these supposedly pro-business legislators encounter the threat of a sales tax increase? On March 7th Senator Mullis told the Catoosa County News he would “wholly support the idea and the legislation” of a 1 cent sales tax increase. That’s a jump of 25%, coming from a legislator who promised in December that with Republicans in charge, we should expect “no new taxes.” (He forgot to preface the statement with “Read my lips.”) Mullis admits that the proposed sales tax increase represents billions of dollars of additional tax payments. Who will be footing the bill for this increase? Every Georgia citizen, rich or poor, will feel the impact.
Sales tax increases also hurt the small businesses Republicans claim they want to protect. Consider an area like Catoosa County. Currently we undercut Tennessee’s sales tax by 3 cents (closer to 2 cents when you consider local taxes.) Catoosa has enjoyed that tax advantage as an incentive for Tennessee consumers to spend billions of dollars in North Georgia. Despite Chattanooga’s wider range of offerings, Tennesseans will drive across the state line for that tax savings. As that tax difference levels off, local businesses can expect to lose both Tennessee customers and Georgia customers to Chattanooga.
Politicians who truly want to protect local businesses should stand against a sales tax increase. Use your weight to maintain a pro-growth business environment, not to step on the grocery bagger who is still subsisting on $5.15 per hour.
-- Jeannie Babb Taylor
Published March 20, 2007
Georgia Republicans are poised to reject any raise in state minimum wage, claiming that such an increase will hurt small businesses. Yet these same legislators are vying for a hefty increase in the state sales tax – a move that affects local businesses far worse than a minimum wage increase.
Inflation has eroded the real minimum wage to a level 30% below the 1968 minimum wage. Last legislative session 39 states at least entertained raising their minimum wages. Georgia alone attempted to drop the minimum wage. Our state senators passed a bill to cut young workers down to $4.25 an hour for their first 90 days of employment – a move that encourages retailers to install a revolving door of job instability.
Senator Jeff Mullis, who voted in favor of the cut, has recently hedged the issue by claiming he would favor an increase if it could be made “palatable to businesses.” In Georgia, the minimum wage law is already made palatable to businesses by exempting those with fewer than six employees or revenues under $40,000 per year. Georgia minimum wage law does not cover high school or college students, newspaper carriers, domestic employees, farm workers, or anyone who receives tips.
State Representative Ron Forster not only opposes a raise in minimum wage; he would like to eliminate the minimum wage altogether. Like many other Libertarians who call themselves Republicans, Forster claims minimum wage laws hurt small businesses, damage the economy, and cause job loss. This mantra is outdated and demonstrated faulty by years of empirical data. Employment grows 1-2% more quickly in states that have a higher minimum wage. Annual and average payroll growth is also faster in those states. Further, the number of small business establishments grows twice as fast in states with higher minimum wage standards. Businesses absorb wage increases through higher productivity, decreased turn-over costs, lower absenteeism, and improved worker morale. In fact, 75% of business owners in a Gallup survey said they would be unaffected by a minimum wage increase of 10%. Nearly half favored a minimum wage increase.
What happens when these supposedly pro-business legislators encounter the threat of a sales tax increase? On March 7th Senator Mullis told the Catoosa County News he would “wholly support the idea and the legislation” of a 1 cent sales tax increase. That’s a jump of 25%, coming from a legislator who promised in December that with Republicans in charge, we should expect “no new taxes.” (He forgot to preface the statement with “Read my lips.”) Mullis admits that the proposed sales tax increase represents billions of dollars of additional tax payments. Who will be footing the bill for this increase? Every Georgia citizen, rich or poor, will feel the impact.
Sales tax increases also hurt the small businesses Republicans claim they want to protect. Consider an area like Catoosa County. Currently we undercut Tennessee’s sales tax by 3 cents (closer to 2 cents when you consider local taxes.) Catoosa has enjoyed that tax advantage as an incentive for Tennessee consumers to spend billions of dollars in North Georgia. Despite Chattanooga’s wider range of offerings, Tennesseans will drive across the state line for that tax savings. As that tax difference levels off, local businesses can expect to lose both Tennessee customers and Georgia customers to Chattanooga.
Politicians who truly want to protect local businesses should stand against a sales tax increase. Use your weight to maintain a pro-growth business environment, not to step on the grocery bagger who is still subsisting on $5.15 per hour.
-- Jeannie Babb Taylor
Published March 20, 2007
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