Georgia’s tax code currently has more than 120 exemptions to various taxes, says state House of Representatives Speaker David Ralston, R-Blue Ridge.
“The problem that you run into when you have that is that your tax policy becomes driven more by special interest politics than it does by internal consistency,” Ralston said. Ralston and other House Republican leaders spoke Wednesday at the Dalton Municipal Airport.
They said that tax reform will be one of the major issues the General Assembly deals with next year. Lawmakers created a panel this year to review Georgia’s state tax code. It will have its first meeting on July 28.
“This group is going to look at every single part of our state tax code. They are going to look at all these exemptions,” Ralston said. “My thought is that we may conclude that we can actually lower tax rates and more evenly distribute the tax burden (by eliminating some or all of those exemptions).”
Ralston said he also believes that simplifying the tax code and cutting tax rates could spur economic growth.
“The best stimulus for this economy is a job. It’s not more spending by government,” he said.
The 11-member panel includes four university economists, four businessmen, the chairman of the Georgia Chamber of Commerce, the chairman of the state chapter of the National Federation of Independent Business and Gov. Sonny Perdue.
Dalton-Whitfield Chamber of Commerce President Brian Anderson said after the meeting that he was glad state officials are finally taking a look at the tax code and how it could be changed to promote economic growth.
“It is such a fragmented code. Looking at it holistically could really help improve it. They are certainly asking the right questions,” Anderson said. “The people on it are the right kind of leaders. My only concern is that there is no one from the manufacturing community.”
Ralston said the tax reform council will present its findings to the Legislature on the first day of the next session in January.
“Their findings and recommendations will then go to a special joint legislative committee. That committee essentially gives it an up-or-down vote. They are not really permitted to alter it significantly,” he said.
Ralston said that if lawmakers don’t vote down the reform plan, it will become law.
He said the next session will be a “difficult” one. In addition to tackling tax reform, lawmakers will have to redraw lines for General Assembly districts as well as for congressional districts. Ralston said he expects Georgia will gain an extra congressional seat after the census numbers are back. He said the federal government will have those numbers ready by March and the General Assembly will have to have a special session for redistricting.