The Georgia Legislature endeth and tax day (April 15th) cometh. And so goes the story for Georgia taxpayers - no tax relief in sight, but tax bills right on time. With over one billion dollars ($1,000,000,000.00) in the reserve, Georgia legislators had every opportunity during the 2008 Georgia General Assembly to either cut taxes or at least allow Georgians to decide for themselves whether to cut Georgia taxes.
There were a couple of possibilities considered down at the Capitol. In the Georgia House of Representatives, the leadership favored eliminating the ad valorem tax on automobiles. The tax was dubbed the “birthday tax” since taxpayers must pay the tax on their automobiles on or before their birthday. The “ax the birthday tax” movement started slowly but seemed to gather momentum as the session progressed. It did not matter. The Georgia Senate had no appetite for such a tax cut.
In the Georgia Senate, some floated the idea of an income tax cut. There were moments when the tax-cut friendly Georgia House would have agreed to any tax-cut, even one that gave only marginal relief to some Georgia taxpayers. Yet, any hope of a Senate sponsored tax-cut was short lived. In the end, the Georgia Senate had no appetite for a tax cut at all.
Legislators reluctant to embrace any form of tax cut for Georgians mostly relied on the same old arguments. Most often, they cited the slowing economy and the potential for sliding tax revenues as the reasons Georgians should not keep more of their money.
Given that Georgia has a Republican legislature and a Republican governor, this is a bit confusing. Since Ronald Reagan, Republicans have typically stood for the proposition that the best way to stimulate an economy is to leave more money in it. This means tax cuts.
Hence, there is a certain irony in the fact that just when Georgians begin to feel the pinch of an economic recession the most, the principle focus of many of the Republicans down at the Capitol was (and is) to make sure that the government has enough money. Now, while many Georgians contemplate the possibilities of cutting spending, Georgia government can rest assured it will have plenty of money.
The problem is that many elected officials believe everything they hear. But, when elected officials rely on bureaucrats to decide when the government can afford a tax cut, there is never a tax cut. The fact is that government bureaucrats have never seen a tax cut that they believed the government could afford.
Just consider the current situation. In the face of a slowing economy, economic stimulus is needed. As the impact of the slowdown hit, average Georgians needed more money in their household budget - not the State of Georgia’s budget. And, there is well over one billion dollars in reserves. So, within these boundaries, if not now, then when? The fact is that if elected officials rely on bureaucrats to decide when the government can afford a tax cut, there will never be a tax cut.
Within this context of the tax cut debate, there appears to be an assumption that the government is best suited to decide how to spend taxpayers money. After all, the idea that the government needs money during a recession presupposes that the government can best decide how to spend the money when tough times come. This assumption is especially noteworthy in connection with the debate surrounding the birthday tax.
Because eliminating the ad valorem tax would involve an amendment to the Georgia Constitution, the proposed tax cut would have required a vote by Georgians. Imagine that possibility - voters deciding. Yet, legislators were even unwilling to allow Georgians to decide whether to eliminate the ad valorem tax.
In the end, the decision was that Georgians could not be trusted to decide whether to cut their own taxes, much less how to spend their own tax dollars.
Worse yet, none of these arguments address the core philosophical issues surrounding a government stockpiling billions of tax dollars as it collects far more money than it needs to operate. Something is out of whack here.