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Friday, January 8, 2010

Call for 21st century tax system by Georgia State Senator

Georgia State Senator Doug Stoner (D-Smyrna) had an op ed in The Atlanta Journal Constitution on 1/7/2010 entitled, "State suffers from revenue problem." I think he did a nice job explaining that tax systems need to be modernized and clarifying some misconceptions that can lead to continued weaknesses such as inequities and lack of transparency and accountability in tax systems.

He reminds readers that tax cuts for some mean tax increases for others. Consideration should be given to what the effect of such cuts is on overall equity in the system. He also notes that too often, tax breaks enacted under the guise of job creation, do not have any accountability measures associated with them so it is not known if the goal was reached. I'd add to this that such credits also are often enacted without any "clawback" provision that requires taxpayers to repay the tax if they ultimately do not create and keep the jobs created. Senator Stoner reminds us that no one would run a business this way. [Note: Tax Notes' blog has a post on 1/8/2010 about the lack of any proof that Georgia's tax credits for job creation are working.]

Senator Stoner concludes with a statement applicable to all states: "Georgia needs fundamental tax reform, linking our budget needs to a 21st century tax system. We must develop a fair and adequate tax structure that enables us to fund high-quality services and make long-term infrastructure investments in education, transportation and water resources, if Georgia is to prosper in the global economy."

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