States are facing their deepest spending crises in decades, and more than two dozen are looking at raising taxes or fees to balance their budgets. But at least one state, Georgia, is bucking the trend and cutting taxes. “I think we’re the only state in the country that’s cutting our taxes, rather than raising them,” Georgia Rep. Tom Graves tells us.
Last week the Georgia House of Representatives overwhelmingly passed the Jobs, Opportunity, and Business Success Act of 2009 (J.O.B.S. Act). That bill provides tax credits to employers for hiring new workers and suspends other business fees and taxes. It passed by a 164-to-4 vote on Wednesday. A second bill, which passed 166-to-0, will eliminate the state tax on business inventory if voters approve it through a statewide referendum.
“For some reason people in Washington seem to think that only big government spending programs can lift us out of this economic recession,” Mr. Graves says. “By passing this act with broad, bipartisan support, we have shown that Georgia is different.” The House Majority Leader, Jerry Keen, calls the bill a “job creator.”
In the state senate, Republicans are pursuing an even more ambitious plan of phasing out the state’s corporate income tax. That idea apparently came from former Reagan economist Arthur Laffer, who spent several weeks with Georgia lawmakers helping design a corporate tax phase-out plan.
The big issue now is whether Republican Governor Sonny Perdue will sign the legislation. Mr. Perdue has had a rocky relationship with pro-tax cut Republicans for nearly six years. He calls some of the provisions of the tax plan “convoluted.” But Mr. Laffer says the bottom line is much simpler: If Gov Perdue signs a tax cut, “Georgia will be dramatically increasing its competitiveness relative to other tax-raising states.”
– Stephen Moore
