Real wages have been flat for 30 years. In 2007, the poorest 20 percent of Georgia’s non-elderly workers paid 63 percent more of their income to state taxes than the top 20 percent. The Georgia Budget and Policy Institute has a striking chart depicting that disparity.
The proposed reform increases that disparity by eliminating the income tax. The lost revenue is replaced by an expanded sales tax. In other words, it reduces the total taxes paid by high earners and increases the total taxes paid by middle and low-income earners, who must spend all they make on taxable living expenses.
Income tax is fair because it recognizes that a family of two parents and two children living on $50,000 per year is not in the same circumstance as a single individual earning $50,000 annually. A hypothetical 10 percent tax on the two-parent, two-child household is a greater sacrifice for them than the same 10 percent tax on the single worker household.
The progressive income tax is fair because it requires a similar sacrifice from each household.
That is why Warren Buffett (no slouch on capitalism or economic development) has been calling for higher taxes for the wealthy. His taxes are lower than his secretary’s (true story) and he doesn’t think that is right. He also thinks it is bad for jobs and economic development.
If Georgia’s workers allow this shift to sales tax as Georgia’s primary revenue generator, you have made people on Wall Street and Peachtree Street very happy. The vast bulk of the money saved by Georgia’s wealthy tax avoiders will not be invested in the state. Don’t allow the wealthy to secede from Georgia; call for equal sacrifice by all Georgians for the costs of state government.
MICHAEL L. REYNOLDS, Rome