Category: Taxes

Rate Cuts, Not Tax Cuts

By Jeffrey Dorfman Economists all agree that tax reform is pro-growth if it broadens the base (such as by eliminating deductions) while reducing marginal tax rates. There is less agreement on other aspects of the issue, such as which types of households should see tax cuts, whether a lower corporate rate would benefit workers or shareholders the most, and whether it would be a good idea for the government to bring in less tax revenue overall. Given all this, what type of tax reform should be our highest priority? In our current situation of low economic growth, the answer appears to be lower rates. Your marginal income-tax rate is the percentage you pay in taxes on your last (or next)… View Article
NEWS RELEASE For Immediate Release October 10, 2017 Contact: Benita Dodd, Georgia Public Policy Foundation benitadodd@georgiapolicy.org | (404) 256-4050  Foundation Joins Coalition Applauding Tax Reform Framework Atlanta – The Georgia Public Policy Foundation has joined a coalition of more than 30 state and national conservative and tax policy organizations applauding the Unified Tax Reform Framework as a promising vision for pro-growth tax reform.  In a letter hand-delivered today to every member of the U.S. House of Representatives, the coalition expressed support for tax reform legislation that will raise wages and take-home pay, incentivize domestic investment and level the playing field for American workers and job creators. “Recent polling shows Americans overwhelmingly support passing comprehensive tax reform, with 73 percent saying… View Article
GEORGIA PUBLIC POLICY FOUNDATION NEWS RELEASE For Immediate Release September 6, 2017 Contact: Benita Dodd benitadodd@georgiapolicy.org | (404) 256-4050  Foundation Joins Coalition Urging Congress to Pass Pro-Growth Tax Reform  Atlanta – The Georgia Public Policy Foundation joined a coalition of more than 20 leading state and national organizations calling on Congress to seize the opportunity to deliver transformative tax reform. In an open letter hand-delivered today to every member of the U.S. House of Representatives, the coalition highlighted the failures of the U.S. tax code and urged Congress to make the tax code simpler, fairer and with lower rates to help revitalize the nation’s middle class. “The outdated U.S. tax code, last overhauled more than three decades ago, has rendered… View Article
House Ways and Means Tax Reform Subcommittee Wednesday, February 22, 2017 Testimony of Kelly McCutchen, President, Georgia Public Policy Foundation  I would like to focus on four positive aspects of HB 329. Pro-Growth: An almost universally held principle of good tax reform is the goal of broadening the tax base and lowering tax rates. This bill does both. Simplification: This bill simplifies the Georgia Tax Code by collapsing six tax brackets into one flat rate. Economic Competitiveness: Lowering Georgia’s top marginal tax rate to 5.4 percent moves Georgia’s rate below that of seven states, including our neighbor North Carolina, which recently reduced its top tax rate of 7.75 percent to a flat rate of 499 percent.… View Article

Tough Choices on Tax Reform for Georgia

By Kelly McCutchen Tennessee just became the second state in U.S. history to eliminate its personal income tax. Florida and Texas do not have a personal income tax. With Georgia’s unsuccessful attempts over the last decade to shift to a more pro-growth tax structure by lowering its personal income tax, it’s worth asking the question: How do these states manage it? Do they spend less? Do other sources of revenue make up for lower income taxes? Or is it something unique that Georgia can’t duplicate? Georgia’s personal income tax brings in more than $8 billion a year, or $878 per capita. The challenge is to identify $878 per capita of spending cuts or other revenues to make up the difference.… View Article

Guide to the Issues: Tax Reform

Principles: Minimize the impact of taxes on economic growth. Taxes are necessary to fund core government services, but every additional dollar of taxes is a discretionary dollar taken away from a family. A decision to raise taxes is an explicit decision that a government program has a higher priority and importance than individual decisions. The private sector is the source of all wealth, and is what drives improvements in the standard of living in a market-based economy. Taxes should consume as small a portion of income as possible, should not interfere with economic growth and investment and should not place the state at a competitive disadvantage. Limit exemptions to encourage a broad tax base and low rates. Exemptions shift the… View Article

Don’t Buy Tax-Free Weekends

By Scott Drenkard and Joseph Henchman Sales tax holidays are periods of time when selected goods are exempted from state (and sometimes local) sales taxes. Such holidays have become an annual event in many states, with exemptions for such targeted products as back-to-school supplies, clothing, computers, hurricane preparedness supplies, products bearing the U.S. government’s Energy Star label, and even guns. In 2016, 17 states will conduct sales tax holidays, down from a peak of 19 states in 2010. Georgia’s back-to-school sales tax holiday takes place July 30-31; the two-day holiday is expected to “save” Georgians up to $74.5 million. The list of tax-exempt items is here.  It includes clothing and footwear costing $100 or less, school supplies costing… View Article

Tax Reform A Needed Boost for Georgia’s Economy

The Senate voted along party lines March 16 on tax reform for Georgia. By Kelly McCutchen The Georgia Senate deserves a hearty congratulations for approving a pro-growth tax reform Wednesday (March 16) that would reduce Georgia’s marginal personal income tax rate for the first time since it was implemented in 1937. To be the best place to do business in the nation, Georgia needs a more competitive tax code. In the Southeast, only South Carolina’s top income tax rate of 7 percent is higher; nationally, 28 states have lower marginal rates. The proposed income tax changes can be explained in less than a minute. Georgia’s six tax brackets would be collapsed into one tax bracket of 5.4 percent (a reduction… View Article
The Georgia Senate voted Wednesday to approve a pro-growth tax reform that would reduce Georgia’s marginal personal income tax rate, the first change since the rate was implemented in 1937. Final passage depends on the House agreeing to the Senate’s changes to the bill and the Governor’s signature. The arguments from opponents of a tax cut range from weak to unfounded; the Georgia Public Policy Foundation rebuts them below. Claim: Tax Reform Needs More Comprehensive Study Tax reform has been studied comprehensively and debated extensively for at least six years. Large corporations have benefited from some reforms but families and small businesses have seen little change.  Just in the past 24 months, the legislature has held at least six hearings… View Article
As Georgia legislators consider tax reform legislation, consider what happened in Kansas.  Writing in Investor’s Business Daily on February 1, 2016, Arthur Laffer and Stephen Moore note, in particular, “sales tax revenues appear to be the prime culprit of revenue shortfall—hardly something caused by an income tax cut.” The article is printed below; access it online here (subscription required): http://www.investors.com/politics/brain-trust/laffer-and-moore-sweet-supply-side-revenge-for-tax-cutters-in-kansas/. By Arthur B. Laffer and Stephen Moore Few states have swirled in more controversy over its tax and budget policies of late as much as Kansas. Liberals have denounced the state’s tax cutting and free market reforms as a debacle that all states should avoid repeating. But we’ve been involved with the Kansas fiscal reforms from the start and… View Article

The Foundation should take a lot of pride in your influence on Georgia governmental policy over the past several years. If you look back on several things that you were crying in the wilderness about several years ago, you will find that Governor Miller adopted them…your influence and your pressure on that process has been a major factor in governmental policy in Georgia. You should be congratulated.

Governor Sonny Perdue more quotes