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POLITICAL NOTEBOOK: State Fair Tax study to begin

It may be the last day of the 2013 General Assembly session, but Thursday will be the beginning for new Fair Tax legislation.

In 2010, Tom Kirby didn't get the votes to replace the FairTax's original sponsor John Linder in Congress, but he won a special election to go to the state House last year, where he plans to continue the quest.

Kirby, R-Loganville, plans to introduce the Georgia Fair Taxation Act of 2014 on legislative Day 40, getting a head start on next year. The legislation is a take on the congressional idea, now being sponsored by U.S. Rep. Rob Woodall, R-Lawrenceville. It would eliminate the state income tax and raise the state sales tax.

"By removing the income tax, we can increase the number of taxpayers and reduce the amount everyone pays," Kirby said. "The public is ready for serious tax reform and bold solutions to solve our economic problems."

Over the legislative break, Kirby plans to bring together leading economists to decide the proper tax rates to ensure a neutral effect on the state's revenue. Over the next nine months, the group will also decide which goods and services should be included in the bill's consumption tax, and whether any exemptions should be made. Rep. Kirby and the economists will also study the positive impacts the change could have on economic development in Georgia.

"This legislation would move Georgia from an income tax to a consumption-based tax, so that tourists and visitors would share in the tax burden," he said. "By shifting this responsibility, the state will be able to receive tax dollars from everyone who enjoys government services, and in turn help Georgia attract new business."

At least eight states, including Florida, Louisiana, Texas and Tennessee, do not have income taxes. Others, like South Carolina, are considering a change.

Political Notebook appears in the Thursday and Sunday editions of the Gwinnett Daily Post.

Camie Young can be reached via email at camie.young@gwinnettdailypost.com.

For archived columns, go to www.gwinnettdailypost.com/politics.

Comments

John5214 1 year, 4 months ago

Bold move and a good one. My guess is the Georgia legislative body will not have Mr. Kirby's guts and therefore this will never make it into law.

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voter73 1 year, 4 months ago

This so-called "fair tax" is just another way to raise taxes. It's a good idea in theory, but no one has figured out how to change from an income tax to a consumption tax without double taxing existing assets.

Currently you are taxed when you earn money and when you spend it. This new tax plan will shift both taxes to when you spend money. This means the money you already paid as income tax will be charged again when you spend it (which is addition to the existing sales or consumption tax) This is clearly double taxation. When I contacted John Linder (who was my congressman) his office said "yes, but it will only happen one time". A one time double charge is one time too many.

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LilburnsFuture 1 year, 4 months ago

The "Fair Tax" is a good idea in theory?? Our CURRENT tax code works in theory. In practice, it's horrible. So, what's your point?

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voter73 1 year, 4 months ago

Yes, it's good in theory.. The problem is how to convert from a combination of income and consumption taxes to just consumption taxes. I keep asking this question but there's no response other than "it will only be a problem once".

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TOWG 1 year, 4 months ago

Read the book voter73. The Fair Tax only goes into effect AFTER the repeal of the income tax.

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voter73 1 year, 4 months ago

Yes, I've been told that before and I've read the book which ignores the problem. I have money in the bank saved after paying income tax. Money will also be saved when there is no income tax. However, both the "before" and "after" money will be taxed the same way when it's spent. This means the "before" money will be taxed higher than the "after"..

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Sandykin 1 year, 4 months ago

Some sort of credit would have to be worked out and included on the tax returns for the last year in which there was an income tax. However, should the law pass, I think a great many people would accelerate their plans and buy that house or whatever before the fair tax went into affect so as to avoid being double taxed.

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FordGalaxy 1 year, 4 months ago

Now we just wait for the plethora of comments telling us how horrible the fair tax is and how it will destroy the middle class while gifting more and more money to the uber-wealthy.

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kevin 1 year, 4 months ago

CORRECTION: Louisiana has a state income tax. Can someone please tell GDP to make the correction?

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DavidBrown 1 year, 4 months ago

I have always been concerned about the Fair Tax. It seems that its only backers are conservative Republicans. If a proposal was only backed by progressive Democrats, like President Obama, Nancy Pelosi and Harry Reid, the conservatives would be wary of that proposal. I wish the Fair Tax had bipartisan backing.

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FordGalaxy 1 year, 4 months ago

DavidBrown - The vast majority of support that I know of personally for the Fair Tax comes from neither Republicans nor Democrats, but actually comes form Libertarians. Libertarian ideals are on the rise on the conservative side of the political spectrum, even though Libertarianism is a fairly centrist view point. Some Republicans latch on, but they're relatively few in number and tend to be a hybrid mixture of Republican and Libertarian. Outside a few "Blue Dogs" you don't see many Democrats talking positively about the Fair Tax.

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Mack711 1 year, 4 months ago

The Fair Tax idea came from Rep; John Linder of the 7th Congressional District of Georgia, he is a Republican and Neal Boortz with Linder wrote the book. I like the idea of the fair tax but it must be implimented on the Federal level first. My question is what affect will this have on a lot of our seniors that are on fixed income. When we do away with the income tax the funds for running the State must come from some where and the Seniors will be hit hardest. Can some one say how this will affect the seniors.

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Jan 1 year, 4 months ago

Yes, FordGalaxy, someone needs to point out how unfair the "Fair Tax" idea really is. I know that many readers like to ignore the facts when I try to give them so read here, a fair explanation of the plan as proposed by Linder. http://en.wikipedia.org/wiki/Fairtax. It becomes obvious that this would be a tax cut for the wealthy who now enjoy a lower effective tax than many of the middle class. Then explain to me how it is fair for those that have planned for retirement by saving money already taxed once must then be taxed a second time as they withdraw it to live on for the rest of their life. It would take a book to explain all the problems with the Fairtax plan. Don't be deceived by the inappropriate name.

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FordGalaxy 1 year, 4 months ago

No offense, Jan. You know I appreciate our discussions. But I have to be honest in saying your research would be laughed out of any high school or college class worth a darn. Wikipedia is not a good source for any research, as it is an open source of editing. If I were a registered user and could edit any article, I could go on the Fair Tax article and say the plan was devised by Abraham Lincoln after he stepped off the Mayflower and met Benjamin Franklin. That's how weak a source Wikipedia is.

Again, I mean no offense. Just trying to point that out.

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Sandykin 1 year, 4 months ago

I suspect the overwhelming majority of people who fund their own retirements, are smart enough to save in tax sheltered accounts such as 401ks and IRAs. You contribute with pretax dollars and interest accrues tax free. You don't pay any tax until the money is withdrawn. Perfect for Fair Tax.

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Jan 1 year, 4 months ago

FordGalaxy: While I agree that one should not depend on Wikipedia, it does allow people to rebut any article in which case their researchers determine which position is more credible. In some cases they post opposing ideas when the answers are not clear. This makes Wikipedia a good point to begin ones research. Hopefully, you are not too lazy too invest a little more time and apply the math as explained in Wikipedia and compare with other sites on the subject. I chose Wikipedia because it is a well written article that does point out the most of the major flaws of the plan, though admittedly not all. Most other sources are obviously either pro Fairtax or anti Fairtax and thus most people will read a few lines of the side in opposition to the way they think and ignore the facts that are laid out. Do the math, it really isn't that difficult, then tell me how the wealthy can pay significantly less tax without the middle class tax burden increasing.

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Jan 1 year, 4 months ago

Sandykin: While some retirement should be in IRAs and 401ks, not all. Then we also have the Roth IRA accounts which are not suppose to be taxed again. Everyone should have non-retirement savings also.

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John5214 1 year, 3 months ago

C'mon people. Not why we can't, but how we can. Excuses, help nobody.

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