Appropriations Chair Terry England Cites Objections to Increasing Sales Tax and Lowering Income Tax

Whenever the idea of tax reform comes up in the state legislature, a common point of discussion is trading the state’s income tax for an increased sales tax. It’s a popular idea, given that neighboring states Florida and Tennessee appear to do well without an income tax. Many Georgians are fans of the FairTax, introduced by Rep. John Linder, and later Rob Woodall, which trades income and payroll taxes on the federal level for a national sales tax.

In the last legislative session, Rep. Tom Kirby of Loganville introduced House Bill 208, which would have eliminated the state income tax. Assigned to the Ways and Means committee, the bill went nowhere.

While it’s unknown whether a similar bill will be introduced for the 2017-2018 session, House Appropriations Committee Chairman Terry England doesn’t seem to be in favor of the idea. Speaking at a Barrow County “Eggs and Issues” breakfast recently, England was asked about the possibility of reducing the income tax in exchange for a higher sales tax, England responded,

When you look at our revenues following the economic recovery, sales tax has remained flat for about the last six years, which is concerning to me and others.

I hope that’s a result of people putting more money back into savings and paying down debt, but I suspect it’s also probably a shift over to more E-commerce.

My inclination is for us to wait a little bit and see what’s going to happen with our sales tax revenues. Then if we do decide to do something, let’s be very cautious about it.

The Peach state derives 45% of its revenue from individual income taxes, with another 4% coming from corporate income taxes. Sales taxes make up 24% of state revenues.

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NoParty4Me
NoParty4Me

Serious Question. How does this play with the “Less Taxes_Less Regulation_Less Government” crowd?

Benevolus
Benevolus

And how does it play with the “government picking winners and losers” crowd?

gcp
gcp

Look for Reps. Dunahoo, Hawkins, Tarvin and a few others to introduce something similar to the 2015/16 version.

https://legiscan.com/GA/text/HB1141/id/1366853/Georgia-2015-HB1141-Introduced.pdf

Saltycracker
Saltycracker

The difference over sales vs. income revenue or what taxable items or deductions to legislate is an issue.

A massive loophole due to fast growing e-commerce and tax free days is nuts except for lobbyists and needy politicians.