On the morning of April 15, America’s dreaded “tax day,” Georgians awoke to the news that their state legislature had voted to completely eliminate two separate state taxes.
Thousands of tea party supporters flooded the State Capitol grounds opposing Washington’s “spend and tax” ways, the very approach to which state lawmakers resolutely rejected just the day before. The legislature’s vote represents a monumental step to reform, reduce and cut taxes for Georgia residents.
The “Georgia Taxpayer Relief Act of 2010” (House Bill 1055) eliminates retirement income tax on Georgia seniors and eliminates the state property tax.
These taxes will be completely phased-out by 2016, by which time the total tax cut is expected to be more than $250 million.
Every Georgian who owns property, a vehicle, and even a boat will experience true tax relief with the elimination of the state property tax.
Georgia’s senior population will receive some much-needed financial assistance through the elimination of the retirement income tax.
Another major component to the bill keeps taxpayers from subsidizing services for others by adjusting outdated and antiquated state fees and fines.
When a fee does not cover the cost of the service provided, taxpayers pick up the tab for the user’s business, service or license by paying the remaining cost.
By addressing this issue now, users will pay the bulk of the cost of services provided, rather than the taxpayer.
For example, a $150 fee will be imposed for individuals appealing DUI license suspensions, rather than the state covering the cost of such a proceeding as is current practice.
This will save taxpayers $3 million per year and takes the burden off the average taxpayer and applies the expense to the users of that service.
Finally, at the request of every hospital in Georgia, the act creates a 1.45 percent hospital fee to fund the state Indigent Care Trust Fund. This is a voluntary program that will help cover a significant gap in Medicaid funding and helps keep at least 30 hospitals open.
The hospital fee is phased-out in three years, of which no funds will go into the state General Fund; this money will be strictly used to provide medical care for Georgia’s children and the poor through the trust fund. By implementing this fee, Georgia will be able to draw down crucial federal Medicaid funding that will allow us to provide better health care services to our neediest citizens.
These tax relief measures will serve to enhance Georgia’s competitiveness.
Thanks to the state Republican leadership’s commitment to responsible fiscal policy, Georgia is already in an excellent position to emerge from this economic downturn.
This is evidenced by the fact that Georgia has been ranked in the top 10 states with the best economic outlook by the American Legislative Exchange Council in their annual “Rich States, Poor States” report, released just last week.
Each year, ALEC ranks states’ economic outlook “based on public policies that have a proven impact on growth, revealing which states have the best chance of experiencing economic recovery.”
The forecast is based on the states’ standing in 15 important state policy variables. These include personal and corporate income tax rates, property tax burden and sales tax burden, which the report notes are all factors influenced by state lawmakers through legislative policy.
A revealing line in the report reads: “While it should be intuitive, states cannot tax, borrow, or spend their way to prosperity,” principles by which Georgia has stood under conservative leadership.
Passage of this bill is a major win for taxpayers. While Americans in states across the nation protest Washington’s reckless spending of their hard-earned money, Georgians can celebrate that their state is working for its people, not the other way around.
Not long from now, tax day in Georgia will mean paying fewer taxes.
Sen. Chip Pearson serves as chairman of the Economic Development Committee. He represents the 51st Senate District, which includes Dawson, Fannin, Gilmer, Lumpkin, Pickens and Union counties and portions of Forsyth and White counties. He may be reached at (404) 656-9221 or via e-mail at email@example.com.