Let’s balance the budget by raising taxes on working people!
Here’s another story to remind us how far the political/media culture of Georgia has fallen. In Wednesday’s AJC, political columnist Jim Galloway lionizes Republican state Rep. Chuck Sims for bucking his party’s anti-tax fundamentalism.
The most interesting point made by Galloway is how much rural areas rely on government jobs. UGA sociologist Doug Bachtel told him in a fifth of the jobs in Coffee County, where Sims lives, are in the public sector. And the portion is higher in other rural counties. In other words, for all their pull-yourself-by-the-bootstraps, cut-the-pork talk, rural Georgia politicians — and their constituents — feed at the trough more than the typical Atlantan.
So when the going gets tough, Sims — the “conservative” — turns out to be all for big government: He doesn’t want to see all those jobs cut to make up for the state’s $1-billion-plus budget shortfall. What’s his solution? Eliminate the sales tax on groceries!
What Galloway doesn’t mention shows how far political discussion in Georgia has fallen: Grocery taxes are a class of tax that falls heavily on average Georgians and most lightly on the wealthy. That’s because middle class and poor people spend a big chunk of their money on necessities, especially groceries, while wealthier people spend a lot on goods and eating out (which already are taxed) and on services (which aren’t taxed).
If you’re a middle-class family of four spending $8,000 on groceries, reinstating the food tax will cost you $360 a year. If you’re stockbroker who makes $160,000 a year and eats out every lunch and dinner, the food tax might set you back $20.
Gov. Zell Miller, of all people, made precisely those sorts of points in the early 1990s when he pushed the Legislature to eliminate the grocery tax. It was the largest tax cut in Georgia history and, most likely, the biggest reduction ever in the tax burden on Georgia’s working families.
But the harm to average folks that would come with reinstating such a progressive tax cut didn’t even warrant a peep in Galloway’s column. The possibilities, as he presents them, are only between Republicans who will cut government services and Republicans who want to make groceries more expensive.
Other tax hikes could reduce the upcoming shortfall in Georgia’s budget without forcing working people to count pennies at the supermarket. The Georgia Budget and Policy Institute has a whole slew of suggestions along those lines. Among them:
• Temporarily tack a 1 percent income tax hike on couples that make more than $400,000 a year and individuals that make more than $200,000. That would put $200 million toward closing the budget shortfall.
• Stop allowing tax filers who itemize on their federal returns to include their state income taxes as itemized deductions on their state returns. It amounts to sort of double-dip deduction for people who tend to be at the upper end of the scale. The take: $450 million.
• Temporarily increase by just half-a-percent the sales tax rate on everything currently taxed: $600 million.
• Expand sales taxes to a certain (mainly luxury) services: $185 million.
Galloway did mention in passing another idea mentioned by the institute: Raising the excise tax on cigarettes by a dollar a pack. That would plug $300 million to $400 million in the budget hole. It’s the tax hike receiving the most serious consideration in the legislature — other than, apparently, making it more expensive to by groceries.
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