Will the proposed tax overhaul raise most Georgians' taxes? (Columbus: sales, real estate)

[toll_booth]

Democrats: Overhaul bill would raise income taxes for those who earn $20k to $180k | Political Insider

[neil0311]

The ESTIMATE...done and requested by Democrats...seems to be that IF you itemize and have an income between $20K and $180K, that you could see an increase of $44 to $419. Those who don't itemize (which is most lower income taxpayers) and those who earn more than $180K (who pay the most taxes now and will continue to pay the most taxes) would see a break.

It's very hard to estimate the impact here, since some of the tax will be moving to a consumption based tax. The reduction in income tax is somewhat easier to predict, but how do you know what purchases or services will be needed in a given year? If someone doesn't subscribe to satellite services or get their car fixed (for example), then the impacts could be very small. Also, itemized deductions vary as well.

In general, we need to look at reducing income taxes more, to bring us in line with FL to the south and TN to the north, neither of which has an income tax. Both of these states use consumption/sales taxes, which are more equitable and allow tourists (sales taxes) and others to share the burden.

[testa50]

I agree with the idea we need to have a more consumption-based system.

Our situation is unique because many of our metros are on state borders: Chattanooga, Columbus, Augusta, and Savannah--probably close to two 2 million combined people in these multi-state metros. For that reason, having a competitive tax regime is particularly important. Or else, we're just pushing economic activity across the state line.

With that said, Georgia's taxes are already pretty darned competitive. If I recall, we are in the 10-15th range or better in terms of low taxes nationwide (depending on specifics of the study). So it's not like we have a major taxation problem or something. Still, it's nice to see government proactively rethinking things that aren't optimal but aren't necessarily detrimental either.

[earthlyfather]

Having looked at staying in Georgia at retirement, or possibly moving to either N Florida, or SE TN, my research says that right now GA is better then N FL, not quite as good as SE TN, in terms of overall tax burden.

[neil0311]

Originally Posted by earthlyfather

Having looked at staying in Georgia at retirement, or possibly moving to either N Florida, or SE TN, my research says that right now GA is better then N FL, not quite as good as SE TN, in terms of overall tax burden.

At what income level? Lots of variables there you're leaving out.

[cwkimbro]

Originally Posted by neil0311

In general, we need to look at reducing income taxes more, to bring us in line with FL to the south and TN to the north, neither of which has an income tax. Both of these states use consumption/sales taxes, which are more equitable and allow tourists (sales taxes) and others to share the burden.

I keep hearing this, but yet the recession effects aside (which has also hit them hard) we have done more than ok. We often have more to provide companies in terms of locations and logistics and we have had no problem attracting growth the past few decades.

The consumption based taxation has been known for a long time to be regressive, particularly at the upper end of the spectrum in relation to income.

The ultimate problem is a family making $40k is going to spend all of their money, even if they save some up for retirement... they will eventually spend it.

The top 10%, more so the top 5% and especially the top 1% does not spend all of the money they make. Alot of the times reinvest it to build personal wealth. It is an easy argument to make that they have more of a choice in doing this, but it is also shown examining wealth distribution in our population.

The problem is the richer someone is.. the more likely they are not going to spend all of the money they made in their lifetime and whatever they don't spend goes untaxed altogether. Time and time again this has been examined at the federal level by fairly conservative presidents and time and time again the reports spot out these problems and it hasn't been taken up.

So the more we shift towards consumptive taxation without properly accounting for this discrepancy by other means of taxation the more we are shifting the burden on the lower and middle classes and the more we are distributing wealth in our society to a small elite group.

[earthlyfather]

Neil, Help me out here. What are the variables I should be considering?

Originally Posted by neil0311

At what income level? Lots of variables there you're leaving out.

[neil0311]

Originally Posted by earthlyfather

Neil, Help me out here. What are the variables I should be considering?

Gross Income. Deductions and exemptions. Disposable income and purchases subject to sales tax. Property value and tax. Ad valorem tax based on number of vehicles owned and value.

How can you calculate someone's tax burden without understanding these factors? Your burden and my burden may be completely different.

If I'm unemployed or my income isn't taxable, then I don't much care about whether or not there's an income tax or how high the tax rate is, right? If I don't own property, then real estate taxes don't much matter to me. If I don't own a car or own a very old car, then the impact of ad valorem is also meaningless.

[earthlyfather]

OK Neil. First of all I'm not concerned with someone else's income status. What I am saying is that the widely published comparative tax burden data is sufficient for me to draw the conclusion that Georgia/county right now is the in the middle of the three states/counties in terms of the tax burden we would face in retirement. Other factors will enter into our decision, but certainly taxes is a facet, as is cost of housing air and water quality, weather, proximity to grand kids and so forth.

I simply made a statement of how I guaged things for us, not wanting to over simplify things, or over complicate things.

[bellhead]

The biggest elephant not seen in the whole tax mess is

Property taxes...

There needs to be property tax reform as well. Many of us are now paying $3,000 a year or more on our properties. When I combine my 3 rental properties my property tax bill is over 10k a year.

The consumption based taxes are good in theory as they close many of the loopholes that lobbyist create for their clients.

I would rather see the elimination of one of the 3 tiers of taxation instead of them going in and redoing the whole tax structure. The whole thing in the end is a shakedown by the politicians on the consumers and businesses of the state who will have to lobby and donate to campaign funds so new loopholes can be created.