Category: Taxes

Georgia Gas Tax Hike: Much Ado About Nothing

By Clay G. Collins and E. Frank Stephenson  One of the most significant bills enacted by the Georgia Legislature in 2015 was the nearly billion-dollar Transportation Funding Act of 2015 (HB 170). A key provision of the bill was a change in Georgia’s gasoline tax, taking effect on July 1.  Before the change, Georgia had a two-part gas tax: a 7.5 cents per gallon excise tax and a 4 percent state sales tax. Gas was also subject to local option sales taxes, which run another 3 percent in most counties. Levying gas taxes as a percentage of the purchase price had drawbacks. One was difficulty in transportation planning because tax revenue fluctuated with gas prices. Another was the perverse feature… View Article

The Bitter Battle Over Bogus Butter

By Harold Brown Government regulations have unintended consequences. Winners are protected, losers are punished, perhaps. Effects are often unpredictable and change with time and conditions. Nothing illustrates the vagaries of government management better than the protection of butter. Most Americans believe the oleomargarine-butter controversy to be a mild competition between two ordinary foods that began in mid-20th century, but it’s much older and more significant. Mark Twain (“Life on the Mississippi,” 1874) overheard a conversation between two salesmen on a Mississippi steamboat that included, “… look at it – smell of it – taste it. Put any test on it you want to. Take your own time – no hurry – make it thorough. There now – what do you… View Article
Everyone loves rankings. While it’s very helpful to understand where you rank compared to your peers, it’s also important to make sure the comparisons are valid. When comparing state taxing and spending it’s important to account for two factors: cost of living and differences in state and local government roles. The cost of living in California, for example, is higher than in Georgia, so the salary for a similar government job will usually be higher in California. Therefore, comparing per capita spending between states can be misleading. This is why economists often prefer to compare spending as a percentage of state personal income. Combining state and local data is also important because some states, like Georgia, are very decentralized, with… View Article

Two Pro-Growth Tax Reform Plans Introduced

Two tax reform bills to lower Georgia’s income tax rate were introduced last week, but it is uncertain if any action will be taken this year. House Bill 435, sponsored by Reps. B.J. Pak and Brett Harrell, would broaden the personal income tax base by limiting itemized deductions and reduce the tax rate from 6 percent to 5.25 percent. Non-itemizers (66 percent of Georgia filers) would see no change in their deductions or taxable income, but would benefit from the rate reduction. Itemized deductions would be limited to charitable contributions (with no limit) and mortgage interest of up to $20,000. According to Bankrate.com, a new 30-year, $440,000 mortgage at a fixed 4.5 percent interest rate would have annual interest payments… View Article

The Economics and Politics of Tax Reform

By Kelly McCutchen  It may surprise many people that liberals and conservatives can agree on many aspects of tax policy. The Special Council for Tax Reform and Fairness for Georgians highlighted these areas of agreement in its final report to the General Assembly in 2011: “Economists generally agree that economic growth and development is best served by a tax system that: Creates as few distortions in economic decision-making as possible Has broad tax bases and low tax rates Has few exemptions and special provisions Promotes equity through transfers, subsidies and tax credits rather than by having tax rates increase with income Taxes consumption rather than income in order to encourage saving and investment Keeps tax rates low since taxes reduce… View Article
By Kelly McCutchen In politics, you must take advantage of windows of opportunity. Sometimes good ideas are sidetracked by unfortunate events, a bad economy or even personality conflicts among political leaders. Given the risk of delaying decisions, Georgia needs to address its transportation shortfall quickly and practically. The Georgia Public Policy Foundation rarely promotes more government spending. But transportation funding is due for an adjustment. The Georgia Department of Transportation consistently wins awards for getting projects done on time and on budget, but it can’t complete projects that aren’t funded. Georgia’s motor fuel excise tax hasn’t changed in 44 years, while fuel efficiency and inflation have steadily eroded the tax base and its purchasing power. The sales tax on motor… View Article
Georgia’s personal state income tax rate at 6 percent is now the highest in the Southeastern United States.  Is that a competitive disadvantage when Florida and Tennessee collect no personal income taxes and every other state that surrounds Georgia is also lower? What are the proper roles for personal, corporate and sales taxes in a state economy?  How to keep Georgia’s economy competitive in the taxes environment was a focus at the fifth annual Georgia Legislative Policy Forum. Tax Foundation economist Liz Malm said sales of goods are decreasing as a percentage of Georgia’s overall economy and sales of services are increasing.  Georgia, however, has not adjusted its taxation strategies to acknowledge this change in the state’s economy.  Malm’s recommendations… View Article
(Corrected version to reflect that SPN was established in 1992 and 150 organizations attended the 2014 SPN conference.) By Benita Dodd When the State Policy Network was established in 1992, the Georgia Public Policy Foundation was one of just 12 independent, free-market, state-focused think tanks around the nation. Its leaders could have met in someone’s garage. Twenty-two years later, the movement has grown and flourishes. At the SPN annual conference in Denver last week (September 23-26) 900 attendees from 150 organizations representing all 50 states met to strategize approaches on free-market, limited government solutions to public policy. If you haven’t heard of SPN, the think tanks’ “umbrella,” visit www.spn.org to find out more. You can be sure the big-government, anti-free… View Article

Are Tax Cuts Working in Kansas?

This  article was published in Reason magazine on July 28, 2014. By A Republican member of the New York State Assembly emails: “I read a number of breathless articles about the ‘failure’ of tax cuts in Kansas.  … My concern is that the Left is winning the PR war on these tax cuts and will use this Kansas example against every governor who tries to reduce taxes if there is no push-back now. What are your thoughts on the Kansas tax cuts?” Great question, assemblyman. “Breathless” is exactly the word to describe the critics of the Kansas tax cuts, and indeed there are a number of them. For a flavor of the argument, one could check out a… View Article

The Georgia Public Policy Foundation has hit another homerun with its Guide to the Issues. This is must reading for anyone interested in public policy in Georgia, and it is an outstanding road map for conservative, common sense solutions to our challengers of today and tomorrow.

Former Georgia Senate Minority Leader Chuck Clay more quotes