With the primaries fast approaching here in Georgia, the candidates in the various races have been blanketing the airwaves with ads, as one would expect.
Until relatively recently, the Republican side of the Governor's race was relatively civil. The ads going up were primarily positive ads talking about positions, and it was one such ad that caught my eye, from John Oxendine, our current Insurance Commissioner.
The specific ad is on YouTube, under the title "Oxendine's Contract With Georgia", with the line that piqued my interest at 0:17. Oxendine promises that he will "scrap the [state] income tax". He goes on to say that he'll fix our state's myriad transportation and water problems, all while downsizing state government. This, he concludes, will naturally lure unsuspecting businesses to Georgia, because the shittiest education system in the country is no bar to those eager companies.
But that line about the income tax stuck with me the most. I'm not an economist, but I was pretty sure that such a tax cut would need to be paid for in some way other than "downsizing government". For instance, in Alaska, there's no income tax, but they have shitloads of oil. Nevada has no income tax, but they have Las Vegas. Georgia has nothing comparable. No vast mineral resources or huge tourist attractions. What was Oxendine up to here?
Firstly, I wanted to know what exactly would need replacement. How much revenue does the income tax bring in for Georgia? A quick check with Dr. Google turned up the Governor's Office of Planning and Budget. Under "Budget Documents", I found "Budget in Briefs", where this overview of the 2009-10 budgets resided. To summarize (this is all on page 6, or the 12th page of the PDF): In FY 2009 (i.e., the fiscal year that will soon come to a close), the GOPB expects that the state individual income tax will account for $8,224,075,509. For FY 2010, their estimate is $8,337,980,400. The report even includes a handy little graph, which states that the individual income tax is supposed to account for 44.9% of our state government's FY 2010 revenues. The corporate income tax is a quite a bit less, but still accounts for about 3% of governmental revenues in FY 2010.
Now it seemed so much more urgent to understand Oxendine's plan, since he proposed to do away with the source of nearly half of the state government's revenues. This led me, naturally, to Oxendine's campaign website. Yes, I know that campaign websites show things only from the candidate's point of view. Still, a campaign website is an easily accessible on-the-record statement by a candidate (Right, Sharron Angle?).
So, under the "Issues" section of Oxendine's website, I found "Tax Reform", which I guessed was exactly what I was looking for. Sure enough, I found this:
My proposal for establishing a 21st Century tax code in Georgia follows two principles:
- Eliminating Unnecessarily Burdensome Taxes – Including the State Income Tax
- Minimizing the Tax Burden on Individuals and Businesses and Provide Incentives for Private Sector Success
Again, there's not much information, but the page referred me to points 2 and 12 from Oxendine's oh-so-originally-named "Contract with Georgia". Point 2 is pretty much the same thing, with a little more elaboration. Apparently, eliminating the state income tax will make entrepreneurs and businesses love Georgia a big huggy bunch. Because the lack of companies moving jobs here has nothing to do with the state of our education system. Nope. Nothing at all.
Point 12, though, is rather illuminating. Oxendine promises to "Promote the Fair Tax". Obviously, the Fair Tax initiative is a federal project, but perhaps he thinks that sauce for the goose is sauce for the gander. The idea that Georgia might get its very own astronomical sales tax was definitely concerning to me.