“The one thing I believe Georgians are wanting us to do now is to create an environment to grow jobs in this state in a way no state has ever done,” said House Speaker Rep. David Ralston, R-Blue Ridge.
Lawmakers appeared prepared to vote on a tax reform plan last week until leaders realized that version eliminated a tax credit for middle income families and turned what they thought would be a tax cut into a tax increase. They were also under pressure from religious groups who feared eliminating certain deductions would lead to fewer charitable donations.
This new version features a 4.6 percent income tax rate, up from the 4.5 pecent rate in the earlier version but still well below the current 6 percent rate. It also features an energy sales tax break for businesses, something Republican leaders believe will make Georgia more attractive to businesses.
“This proposal puts Georgia on a road to a consumption based tax system that will be flatter and fairer and away from a tax system that taxes productivity,” said Ralston.
The tax reform bill is not revenue neutral as many Republicans originally wanted. Instead, it will cost the state about $130 million next fiscal year, something the GOP says it will address in the supplemental budget next year. They believe an improving economy and new job growth will help reduce that overall number.
But critics are already lining up against the bill. House Minority Leader Rep. Stacey Abrams, D-Atlanta, worries Republicans are rushing this bill through the legislature without really knowing its consequences.
“I believe we should wait and read and review the plan,” Abrams said. “We need to analyze it and make certain we’ve considered all the models, but more importantly, there’s no urgency to this.”
Abrams doesn’t believe tax cuts will attract jobs and worries that the budget impact could hurt things that she says does attract businesses like good schools and infrastructure.
“I don’t know if I’m ready to risk Georgia taxpayer wallets on our guestamations and magic,” she said.
The Governor’s Office is reportedly on board with the plan. It must pass the House Monday if it has any chance of passing the Senate on the final day of the session.
