Are You Ready for an Across-the-Board Service Tax?
Radio Commentary, 90.7, 91.7 New Life FM, February 4, 2011
By Sue Ella Deadwyler
Good morning, Jim. Last week I reported on the January 7, 2011 report by the special tax reform Council set up by the legislature last year. The Council had eleven fact-finding sessions last Summer and came up with a new tax structure that would phase out two percent of the state income tax and add a consumption tax to everything we use, except the air we breathe.
But that’s not entirely true. If you must use an oxygen tank to breathe, that, also, will be taxed, along with all other medical equipment you use. Some say the two-percent phase-out on income tax would offset the onerous consumption tax, but that’s not true, either. The proposal is very light on trade-off and burdensomely heavy on new taxes.
If these recommendations become law, we will pay taxes on garbage pick-up services, housekeeping services, laundry and dry cleaning services, auto repair services, haircuts and styling, medical equipment and supplies. And that’s only a small part of the list. If you sell your old car or boat or airplane, you’ll have to charge a state sales tax on the selling price.
The Council pointed out that the state lost the biggest portion of its sales tax revenue, when it stopped taxing groceries. So, under this new plan, the state’s full sales tax would be added to food purchases, effective June 30th. Whatever taxes you’re now paying on food are local taxes. There would be no sales tax holidays for school clothes or supplies and the gasoline tax would be recalculated, so you won’t know exactly how much it goes up.
The Council’s report is almost a hundred pages long, but this is a tiny glimpse into the new taxes consumers will pay on services that are not taxed now. Note that I said, “taxes consumers will pay.” Meaning, the Council’s plan is to build the tax base by eliminating tax exemptions consumers get now, while honoring all current tax exemptions for governments, businesses and agriculture. If this plan is implemented, consumers will pay the state an estimated additional $246,738,000 every year in new service taxes, on top of sales taxes we now pay on purchases.
The Special Joint Committee members are Co-Chairman Senator Bill Heath, 404 656-3943; Co-Chairman Representative Channell, 404 656-5103; Senator Tommie Williams, 404 656-0089; Representative Jan Jones, 404 656-5072; Senator Rogers, 404 463-1378; Representative O’Neal, 404 656-5052; Senator Brown, 404 656-5035; Representative Abrams, 404 656-5058; Senator Steve Thompson, 404 656-0083; Senator Cowsert, 404 463-1383; Representative Bob Bryant, 404 656-0298; and 404 656-5025.
They are the 12 legislators that will make the final decisions on tax increase bills that will go directly to the Senate and House floors for an up-or-down vote. The normal legislative process will be by-passed and there’s no plan for public hearings on this issue. NOW is the time to influence their decisions. For Georgia Insight I’m Sue Ella Deadwyler, your Capitol correspondent.