Wednesday, December 07, 2011

In Georgia, Republican leaders plot class warfare on the middle class

See the article for informative graphs

http://blogs.ajc.com/jay-bookman-blog/2011/12/07/in-georgia-state-leaders-plot-class-warfare-on-the-middle-class/

6:59 am December 7, 2011, by Jay Bookman

With the state economy stuck in neutral, Georgia legislators are coming up with all kinds of neat ideas to restore growth and jobs. But it’s funny — in a not-so-funny way — how many of the ideas are founded on the same general theme:

They want to take money out of your pocket and give it to other people who don’t need it as much as you do.

We have, for example, the concept of CAPCOs. Under legislation that has already cleared the state House, up to $125 million of taxes that would otherwise be paid by state insurance companies would be diverted away from state government and given away to private investors. And no, I’m not exaggerating. It would almost literally be given away. The investors in question — taking no risk themselves — would get to keep those tax dollars, as well as any profits the investment might produce.

[...]

And then there’s “tax reform.” Legislative leaders have already begun to meet to plot ways to raise taxes on working people and the middle class in order to finance tax cuts for “the producers.” The plan at the moment is to raise the state sales tax a penny and also extend the sales tax to food for the first time in almost 20 years. Legislators would then use that revenue to lower taxes on business and also lower the top income tax rate.

It is indisputable that such changes would increase the tax burden on the vast majority of Georgians, while reducing it on businesses and those already doing well.

[...]

It’s important to note that Georgia already has a deeply regressive tax system, which means that lower-income households pay a much bigger share of their income in taxes than do higher-income families. According to a 2009 study by the Institute for Taxation and Economic Policy, Georgia households making $82,000 or less pay an average of 10.7 percent of their income in state and local taxes. (see charts below)

The top 1 percent of Georgia households — those with an income above $433,000 — pay just 5.7 percent of their income in state and local taxes.

(Note: The above numbers apply only to non-elderly households, because many states offer special tax treatment to seniors. The numbers also include the value of federal deductions for state taxes.)

In other words, the bottom 80 percent of Georgians pay taxes at almost twice the rate of the top 1 percent. And yet by raising the sales tax and taxing food, state legislators would skew that system even more heavily against those trying to feed their families and pay their mortgages in a tough economy.

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