In All Fairness

If you pay attention to Georgia politics at all, you’ve probably heard an earful by now about House Speaker Glenn Richardson’s proposal to radically revise the state’s tax system (and if you haven’t heard about it, Richardson will be more than happy to come address your local civic club at its next meeting).

Richardson’s plan to eliminate property taxes has drawn criticism from many journalists, including publisher Neely Young in a column in Georgia Trend’s August issue, and the criticisms are valid.

What Richardson proposes to do, basically, is terminate the ability of local governments to raise money for their annual operations and transfer that authority to a small group of political insiders at the state capitol. [Editor’s note: See page 64 for a Q&A with Richardson.]

If you are a fan of large, all-powerful central governments, then you should be happy at that prospect. If you’re someone who believes local voters and governments should make their own fiscal decisions, on the other hand, then you might not be such a happy camper.

In all fairness to the speaker, however, I do want to point out one aspect of Richardson’s tax plan that makes a lot of sense and would truly benefit all Georgians: the provision to get rid of the dozens of tax exemptions that legislators have adopted over the years at the behest of various special interests.

If Richardson would jettison the rest of his tax plan and concentrate solely on eliminating those tax loopholes – which tend to benefit wealthy individuals and corporations at the expense of working-class families – then he would deserve to have his own statue erected on the capitol grounds.

Our esteemed lawmakers have always had a tendency to give tax breaks and exemptions to people who don’t really need them; but it has gotten out of control in recent years.

Case in point: A few years ago the Legislature passed a sales tax exemption worth $6 million for the Georgia Aquarium that Home Depot founder Bernie Marcus was building.

We can all agree that Bernie Marcus is a good guy who started a business venture that has provided jobs for thousands of Georgians and affluence for many shareholders of Home Depot. We can also agree that it was very generous of him to build an aquarium that has attracted and will continue to draw tourists to Atlanta.

But Bernie Marcus is also one of the wealthiest people in our fair state. For someone with his personal net worth, a $6 million tax break is chump change. It doesn’t even amount to a rounding error on his yearly tax return. Why give him such a tax break at the same time that we’re cutting state funding to local school systems?

In the most recent legislative session, lawmakers passed a sales tax exemption on jet fuel purchases that will provide a financial benefit estimated at around $44 million for Delta Air Lines.

Again, we can all agree that Delta has been a good corporate citizen that has employed a lot of people and helped make Atlanta the aviation hub of the Southeast. But the airline’s executives also made some faulty business decisions over the past decade or so that helped push Delta into bankruptcy.

There are a lot of businesses that have gone belly up because their management made bad strategic or operational decisions. If Delta can get $44 million from the state, why not them? Where do you draw the line in determining which corporations deserve a financial windfall and which ones don’t?

Our state tax code is riddled with exemptions like the ones I’ve just described. When a person or institution is given a break from paying a portion of their taxes, that financial obligation is just passed along to other Georgia taxpayers – namely, you and me – to make up.

While I’m appreciative of what Delta Air Lines has done for Atlanta, I don’t want to pay their taxes for them.

Richardson is correct when he advocates eliminating these tax exemptions. Unfortunately, the only way to get there is by adopting the rest of the speaker’s proposal, a cure that would be much worse than the disease – like cutting off your hand because you have a broken fingernail.

There is surely a better way to fix our tax system, but it’s going to take smart, principled leadership to do it. Are there any leaders out there?