ATLANTA– A handful of junior Republican legislators announced Wednesday that they will introduce legislation to replace the state’s income tax with an increase in the sales tax, including a broadening in the transactions subject to the tax.
They said taxing groceries could become part of their strategy, but they said the specifics – such as how high the sales tax would rise -- would all be determined between now and when the General Assembly convenes again in January. Thursday is the final day of the 2013 session.
“That’s one of the reasons we’re introducing this on Day 40,” said principle sponsor Rep. Tom Kirby, R-Loganville. “…We start the discussion with the What and then bring the numbers in.”
Kirby is just completing his first, complete legislative session, and he was joined by Rep. David Stokes, R-Newnan, who is the newest legislator after having won a special election this month. But Kirby said one-tenth of the House of Representatives are cosponsoring his bill, including some in leadership positions.
He said he also has the blessings of Senate President Pro Tempore David Shafer who introduced twin constitutional amendments last month to cap the income tax and to require that any increases in the sales tax go toward eliminating the income tax.
OtherGeorgialeaders have tried to get rid of the income tax, all arguing it would attract more employers. But none have figured out a political way to make the transition without some Georgians getting stuck with higher taxes.
Asked why their new initiative could succeed when others with greater stature failed, Kirby said timing is in their favor.
“The public is really ready for a serious tax transformation, not only at the state level but at the federal level,” he said, pointing to the support for GOP presidential candidate Herman Cain when he announced a similar plan as well as several Republicans who won election to Congress on platforms to replace the federal income tax with a national sales tax.
“It’s tough to run in a Republican primary and not be for it,” added cosponsor Rep. Buzz Brockway, R-Lawrenceville.
National proposals have generally included a “pre-bate” of a cash payment to low-income people to compensate for the higher sales tax on necessities which would be a greater percentage of their wages. Kirby said the latest proposal doesn’t include that feature and that the poor would benefit from added jobs and lower prices.
Democrats have long been critical of consumption taxes because of their impact on the poor.
Alan Essig, executive director of the think tank Georgia Budget a& Policy Foundation, says the transition could be jarring for individuals and the economy.
“To match today’s revenues, the sales tax would rise to more than 11 percent and combine with the local sales levy to exceed 15 percent in some counties,” he said. “Georgiawould have the highest sales tax in the region, and the state’s economy would suffer because of it.”