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Tax plan has merits, but also needs scrutiny
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Georgia House Speaker Glenn Richardson came to Richmond Hill on Thursday to tout his plan to eliminate property taxes and replace them with a combination of sales taxes on both goods and services.

A lot of it is no doubt music to the ears of many homeowners - particularly those who have seen their property taxes go through the roof in recent years, mostly due to residential growth which has driven up the price of real estate and thus property assessments. And Richardson has a solid point with regard to the current system, which is geared toward a time when land was synonymous with wealth. But that’s no longer the case and it doesn’t take into account those who inherit property or bought it before Georgia’s coast became a hot commodity and property values skyrocketed. What’s more, the current system doesn’t give residents much leeway after an assessment is due and any appeals have been settled.

"You get your property tax bill each year and you’ve got two clear choices," Richardson told Rotarians. "You can either pay it or not. You pay it and you get along. You don’t pay it, we take your house."

Naturally, there are a lot of details yet to be divulged in his proposal, which is a constitutional amendment known as HR900. What’s more, it has met with fierce resistance from groups such as the Georgia Municipal Association and some local government officials from around the state.

He’s issued a challenge back, he told the Rotary Club. Let voters decide. "I think we’re elected to look at what we’re doing and ask, is this the best way to deliver services to our citizens?" Richardson said. "Local governments have said, ‘How dare I change their system of governance. How dare anybody from the state propose change?’ And I look at them and say, ‘How dare anyone stop the people from determining their system of governance.’"

Still, there’s reason for concern, since Richardson’s plan would put state politicians in charge of divvying out to local governments the proceeds from the "consumption" taxes on goods and services.

That may lead to politics deciding who gets what, although it seems someone in government somewhere ought to be smart enough to come up with a formula for the equitable and fair distribution of tax money and make it law.

There’s another problem with Richardson’s plan, according to groups such as GMA and the Georgia Budget and Policy Institute. The GBPI said the proposal could eliminate an estimated $9.5 billion in revenue from local governments across the state - money dedicated to schools and local services such as police and fire protection. Richardson claims his program will bring in enough money to cover any shortfall.

"We only tax about $142 billion from goods, and there is $140 to $240 billion dollars in services that we don’t tax at all," he said Thursday. "You see, in the year 1850 the only thing we had to tax was crops. In 2007, we don’t have crops, we have services, yet we don’t tax them at all."

But he notes this is a tax shift, not tax relief. If you buy something, you pay a tax on it. If you use something, you pay a tax on it. And some questions to consider include how medical bills will be taxed and whether some caps Richardson would put on taxes paid to providers for certain services - lawyers, for example - aren’t actually tax relief for big business. Exemptions also will have to be either entirely eliminated or applied only to those who need them most, and it’s a safe bet every group with an exemption will fight hard to keep it.

But at least Richardson is advocating doing something to fix a system badly in need of repair. Indeed, it seems that without HR900 nobody outside a few think tank economists would be saying much about the inequities of the current property tax system.

"Do we want to keep taxing people’s houses? Or do we want to tax consumption? Yes or no. I’m out promoting change. And I’m promoting letting people decide," he told the Rotary Club. "Twenty five years ago we didn’t have the lap top computer. Ten years ago, we didn’t have these devices called Blackberrys. Technology is coming around and changing rapidly. We’ll very soon be more service-oriented than we are today. What are we going to do then? Are we still going to tax people’s dirt, where they live? I say no. I say it’s time to change. It’s time to put it on the ballot."

We agree. Our elected officials at the state level need to take a serious and fair look at the numbers and hold a number of town hall meetings to discuss the pros and cons of Richardson’s plan with Georgians. But this isn’t something that should be stalled indefinitely. When it comes to property taxes, it's long past time for business as usual.

Bryan County News

Nov. 17, 2007

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