I have some concerns about the the State Speaker of the House's proposed tax reform. The more I learn in my two economic classes the more concerns I have about his policy shift for the state. I recognize that a new tax policy is imminently needed as it seems that cuts continue for the state which tells me they either are going broke or might become broke because of all the tax cuts.


So how do you politically recoup the losses (tax cuts) that have made you popular as a politician, but not raise taxes (lose your job aka political suicide for the GOP of GA)? You call it something different: you call it TAX REFORM.


It is interesting watching the bashing back and forth between the speaker and the governor. I don't know that I have seen such blatant intra-party squabbling since Mark Taylor ate Cathy Cox in the democratic gubernatorial candidacy. The speaker is stealing some thunder from the Governor who is trying to get into national politics, while laying some ground work for his own progression as a politician. This makes Sonny very unhappy. He likes his thunder.

What the speaker is proposing is a sales tax as the main source of revenue for the state. He wants to eliminate the property tax because it is "too high." In listening to a snip it of him on 11 alive, he wants to almost eliminate property tax (thus, who would still have to pay? My guess is the middle class.). Here are my concerns:

• I have learned that sales tax is a regressive tax. A regressive tax is one that increases the less income you make. So the more money you make, the less tax you pay. The less money you make, the more tax you pay. This means that the lower echelon gets lower and the higher echelon gets higher and the middle gets stuck with the bill.

• I understand that there is a misperception that taking the property tax money and giving it back to those who own property would give them money to spend thus being collected in sales tax. This takes into two assumptions. One, that the items the wealthy buy with the money is not more land. Two that they will buy things that are sales taxed in Georgia. What happens if they take the two grand from the non-prop tax and reinvest it in more land? What happens if they buy stuff in N.C.? Then the money that is redistributed will not come back to Georgia as revenue, but create a gaping whole in the revenue collection process. Also, what happens if they save it? This is something I have not heard the Speaker address yet: who makes up the difference in revenue if it is not collected by the state?

• Now, dealing with the flip side of the problem. What if they are a home owner and every year claim property taxes as a write off for their federal income taxes...now that there is no property tax, there is no tax write off. So much for not paying the property tax. Now instead of the state getting that money, the Feds get the money. That doesn't seem quite right. How will we know that money gets redistributed to Georgia? We don't. Instead, we just pay more taxes. Doesn't it seem like if property owners were going to pay taxes that the State should be the one getting the cash? I mean come on. There is no way for the property owners to reinvest when they just change the name on the check.

• Finally, there is a notion that the sales tax would broaden the base of income by taxing the passer "throughs". The tourists will make up for the difference. I recognize that we are definitely becoming a nation of leisure. We are wealthier than most nations and more of our citizens have the ability to travel. As an added bonus we have states instead of little countries so there is no reason to have extra papers to travel and eliminating a hassle for the common vacationer. Well, cool. Where would you like to travel to? Not Georgia, they tax you for going there. It is too expensive to be considered a stopping point. Let's go to New Hampshire where there is no sales tax at all. Then we can consume all we'd like. Get my drift?

Why do we want to run off a major industry in Georgia? Why tax that industry? Why not tax manufacturing or utilities? Why tax tourism? Why tax the poor? Why tax those who have property? What is the point in taxing everyone for everything and not getting a whole lot in return?

Although, it does shine the spotlight on the speaker. It does boost the political squabbling in the state congress. It does make those of us who watch, watch with more fervor. These are good things for someone who wants to be looked at as the next GOP gubernatorial candidate. It is also a great way to hide the fact that you want to raise taxes as a solution to state going broke.

I guess the main thing taking micro and macro economics has taught me this semester is that the Speaker needs to enroll in the courses before he goes off creating economic policies. If he hasn't had the courses, then he will become educated. If he has had the courses, it will be a good brush up and maybe knock some sense into him. All in all, my economics courses have taught me, not many people understand economics.