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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Here Come Regressive State Taxes

With all the brouhaha over the Obama-McConnell tax deal, it hasn’t been much noticed that all over the country, states are struggling with huge fiscal problems, and the demands of newly empowered Republican governors and legislators to reduce top-end and corporate taxes.
It’s all steadily playing out in my home state of Georgia, as this report from James Salzer of the Atlanta Journal-Constitution indicates:

The head of a task force charged with rewriting the state tax code made it clear Tuesday that his panel will recommend moving toward heavier reliance on state sales taxes, and less on income and corporate taxes.
A.D. Frazier, chairman of the Special Council on Tax Reform and Fairness for Georgians, gave state lawmakers and lobbyists few details during an address on the University of Georgia campus. Those, he said, won’t come until the panel releases its final recommendations in January.
But the push to broaden the sales tax base — charging the state’s 4 percent levy on more goods and services — and cut personal and corporate income taxes meshes with the philosophy of the Republican leaders who will have to try to sell the recommendations to the General Assembly.

This isn’t terribly surprising, given the general attitude of Republicans towards corporations and the very wealthy as “job creators” who should get a free ride if not actual government subsidies. But the idea of actually increasing taxes on wage-earning folk remains a bit difficult, particularly in state like Georgia, where tourism isn’t sufficiently robust to justify higher sales taxes as mainly paid by outsiders.
So far, no one in GA Republican circles has gone as far as Gov.-elect Nikki Haley of SC, who during the late campaign came out for eliminating a sales tax exemption for food sales on grounds that such concessions to people with a need to feed children didn’t create any jobs.
But such initiatives are soon to come, and it will be important for Democrats to describe them as what they are: redistribution of income from the working poor and the middle class to the very rich, and class warfare.

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