Time to redo state tax code

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January 27, 2013

Time to redo state tax code

The Daily Citizen The Dalton Daily Citizen Sun Jan 27, 2013, 01:40 PM EST

Two years ago, the Georgia General Assembly had an opportunity to remake the state’s tax system to make it more fair, more transparent and more attractive to business. And they let it slip away.

A blue-ribbon panel had spent a year reviewing the state’s tax system and recommended a complete overhaul that would cut the state’s top income tax rate, increase the sales tax and end many special tax deductions and exemptions. Lawmakers found that plan too bold and did not enact it.

Last year, they took up tax reform again, making a number of small changes to the tax code, most notably phasing out the sales tax on energy used in manufacturing. But those changes amounted to nothing more than a random set of tweaks with no real vision behind them.

Lawmakers in other states may not be so timid.

In just the past few weeks, governors and top Legislative leaders in Louisiana, Nebraska, Kansas and North Carolina have set a goal of ending the income taxes in those states.

Ending those income taxes could provide a strong economic boost for those states. The Raleigh, N.C.,-based John W. Pope Civitas Insitute reports that states with no income taxes had higher economic growth over the past 20 years than states that taxed income.

Maybe some dramatic action by lawmakers in these states will spur Georgia legislators to take another crack at completely overhauling this state’s tax code. If they don’t, Georgia could become less competitive in its attempts to attract and keep businesses and high-earning individuals.

Tennessee and Florida do not tax incomes. If North Carolina ends its state income tax, Georgia would find itself surrounded on three sides by states with no income tax. That’s not an enviable place to be.

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