The Road To Hell Runs Right Through The Georgia Legislature – Part 1
by Bill Simon
Think what you want about Georgia Speaker of The House Glenn Richardson, but on the issue of tax reduction this past session, his point of view trumps Lt. Governor Casey Cagle’s by 10 horse lengths.
At issue was what kind of tax-reduction should take place? The main component of the House side was to give the voters of Georgia a chance to vote to eliminate the ad valorem tax on our vehicles. I don’t know about you, but I’ve paid around $235 per year on the ever-so-slowly-declining-assessed value on my car. I imagine folks who buy SUVs at prices $10,000 above my Accord pay a few hundred more per year.
Cagle and the Senate’s proposal was to “reduce the state income tax by 10% over 5 years.” Cagle and his merry band of math flunk-outs really thought this was THE way to go. However, faced with the following statistics I wonder how long he’s willing to hold onto this point of view:
According to TaxFoundation.org the combined tax rate for Georgia local and state income tax is around 10.3%. I don’t think we have a “local” income tax, so, I think we can safely assume the 10.3% is all state income tax.
Now, the Tax Foundation site goes on to state that the per capita income for Georgia is on the average of $35,210. I think that number is high and may be way off, but, for conservative estimating purposes that give the Senate side of this equation the most benefit of the doubt, we’ll stick with $35,210.
So, approximately how much state income tax does everyone pay yearly? Multiply .103 times $35,210 and you get $3,627.00 in income tax the average Georgian pays to the state.
Cagle thinks that 10% of this amount, phased-in over 5 years will amount to something really, really substantial for your wallet. Let’s continue with Math 001 (“001” is a math course designed for those who flunked-out of Math 101) and see if Cagle is right:
10% of 3627 = $362.70
Divide $362.70 by 5 (as in “5 Years”), and what do you get?
$72.53 per year in less taxes to pay. (And, again, this is based on the high estimate of $35,210 being anywhere near the correct value for Georgia’s per capita).
Did you go “WOWWWWwwwwwwwwww…! That’s a lot of money! I can use that to go buy 2 bags of Nutro Dry dog food! I can use that money to fill-up my Honda Accord 2 times! Wowwwwwwww-eeeeee….”
I don’t think Lt. Governor Cagle knows a whole lot about what his “policy issues” really mean in the real world. Who the heck did this research for him and said it would amount to a better savings for the Georgia taxpayer than cutting-out the ad valorem tax on vehicles? Who thinks $72 is a larger number than $200? Maybe Casey got tax policy mixed-up with golf scores.
One can only wonder if the same researcher who drew the Cagle tax-reduction plan up was related to the policy researcher who took a flawed research study on the effects of allowing Sunday alcohol sales in New Mexico to give to the Governor and the Senate used as the basis to vote-down the Sunday sales bill from the House…
April 6th, 2008 at 10:35 pm
Re the Tax Foundation numbers you cite, you seem to have misread the linked report. The 10.3% figure is the total burden of all state and local taxes in Georgia as a percent of personal income – not income taxes. This includes income, property, sales and excise taxes. Also, if you’ve ever filled out a GA income tax form, you may have noticed that the top marginal rate in GA is 6%, so there is no way the average rate could be 10.3%. Finally, you neglected to mention what the Tax Foundation said in regard to that 10.3% tax burden – that is, that it is .7% below the national averages and ranks GA 32nd out of the fifty states in total state and local tax burden.
Just thought you’d want the facts.
April 7th, 2008 at 6:10 pm
Anne,
I appreciate the correction…I was giving the Senate and Casey Cagle as large a cushion as I could.
With a 6% top-rate income tax burden, the amount of tax money that gets “reduced” over 5 years becomes even tinier.
As far as the news that Georgia’s 0.7% below the national average…that’s hardly due to the current leadership in the state senate, house, or governor’s mansion.
The point of the article was to demonstrate that a 10% income tax reduction over 5 years amounted to about $50 per year, while the chance to eliminate the car ad valorem tax amounted to something on the order of $200 PER YEAR…so, $1000 over 5 years, and savings every year after that.
May 3rd, 2008 at 2:36 pm
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