Wednesday, November 14, 2007

Fleming on Richardson II

I attended the presentation State Representative and House Majority Whip Barry Fleming made on Monday evening to the Clarke County Republican Committee concerning the GREAT Plan (a.k.a the ”Glenn tax”).

This was my first opportunity to chat with Fleming; I found him to be a personable and inquisitive sort. He carried off his presentation well, making some valid points in favor of Richardson’s plan, which would eliminate property taxes by expanding the scope of the state’s sales tax (i.e., doing away with the 120 plus exemptions that currently exist). One of his points was that personal and family income were not keeping pace with the staggering increases in property taxes across the state. Another point was that, as the state’s economy had shifted away from a land-based one (agriculture) to an exchange-based one (services), the tax system had not been adjusted accordingly. So far, so good.

Even so, I find myself ambivalent about the plan. On the one hand, it appeals to me by virtue of being a consumption tax, which I find far more philosophically palatable than either income or property taxes. On the other hand, I am aware of some potential shortcomings of the plan, such as those brought up by my frequent partner in crime, John Marsh. He has serious concerns that fiddling with the particular method of tax collection will not affect the real problem inherent in governmental budgeting, namely the continued growth in spending. From an accountability standpoint, he also thinks it a bad idea to “decouple” those collecting the taxes (the state) from those spending them (local governments and school boards). Also, he thinks that taxing business to business transactions could put Georgia firms at a competitive disadvantage vis-à-vis their competitors in other states.

As one who has been a keen observer of government financing at the local and state levels, I think that John effectively counters some of the hype attached to the GREAT Plan. I fully support an overhaul of the state’s tax system, but remain to be convinced that this particular approach shold be it.

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