Olens advocates Georgia adopting Texas-type taxes
by Jon Gillooly
April 08, 2013 12:06 AM | 6738 views | 15 15 comments | 19 19 recommendations | email to a friend | print
Georgia Attorney General Sam Olens talks with members of the Cobb County GOP before giving the keynote address at the party’s breakfast in Marietta on Saturday.<br>Staff/Kelly J. Huff
Georgia Attorney General Sam Olens talks with members of the Cobb County GOP before giving the keynote address at the party’s breakfast in Marietta on Saturday.
Staff/Kelly J. Huff
MARIETTA — Georgia should follow Texas and eliminate the income tax, state Attorney General Sam Olens told the Cobb Republican Party at its Saturday breakfast.

“Texas by far is the most business-friendly state,” Olens said. “They haven’t had a recession.”

Gov. Nathan Deal has tried to get sweeping tax reform through the General Assembly, Olens said, but to date the Legislature has only been willing to take small steps.

“And I think it’s really necessary to take the big step,” he said. “If you look at all the tax credits and other types of corporate welfare we have in our state, you’re sort of choosing some winners and losers in that regard. Wouldn’t it be better to simply have no corporate welfare, eliminate the income tax and put all companies on the same level playing field?”

Momentum to eliminate the income tax is building, Olens said.

“I think the Governor pushed it early on in his administration,” Olens said. “You saw President Pro Tem David Shafer speak in favor of over several years eliminating income tax towards the beginning of the session. You saw some House legislators discussing it towards the very end of the session. I think it’s one of those issues that just takes several years to get the necessary momentum.”

Georgia’s neighbors, Florida and Tennessee, don’t have an income tax, Olens said.

“You know, I think we need to stop the game of the credits and the deductions and just stop the tax where you don’t need it at that point,” he said.

The industries in Georgia that receive corporate welfare are vast, ranging from manufacturing to aeronautics.

“It’s not that I don’t support helping business, it’s I support helping all business rather than once again choosing which business,” Olens said. “I think it is our obligation to tell our members of the General Assembly that we really want the session to get jobs, and that doesn’t mean corporate welfare that means replacing the tax code, both federally and state, and having guidelines that actually promote job growth, and I think that’s the key issue. We spend entirely too much time on the small stuff. And we’re not spending nearly enough time on the big stuff.”

Among those at the breakfast, held at the county GOP’s Roswell Road headquarters, was J.D. Van Brink, chairman of the Marietta-based Georgia Tea Party, who said he agreed with Olens.

“The thing is the corporate tax in Georgia pulls in only about a little bit more than three percent of the state revenues, but when you think of the cost of compliance for business in order to comply with the corporate tax, so it’s not just the tax itself, which is a pass through tax onto all of us, the consumers,” Van Brink said. “There’s also the cost of compliance which is passed onto us, and it makes us less competitive with our neighboring states, and so if we were to eliminate it we would probably end up making even more in tax revenue with the increased tax base from businesses moving here from Georgia, if we made the cost of doing business here less. And we’ll benefit from that.”

In a March Wall Street Journal column, Arthur Laffer and Stephen Moore predicted a zero-income-tax domino effect in the South.

“Georgia can hardly sustain a 6 percent income tax if businesses can skip across the border into neighboring states like Florida, Tennessee or South Carolina,” the authors wrote.

Advocating vs. educating on tax increases

During the question and answer part of his talk, Lance Lamberton of the Cobb Taxpayers Association asked Olens whether it was legal for an elected official, once an election has been called for a special purpose local option sales tax, to advocate for or against that SPLOST.

Olens said as a general statement, elected officials do not lose their First Amendment rights and can discuss how they feel about ballot items as long as it does not involve “any” government resources or time.

“When you start using fax machines, copy machines and email, that’s when you are violating versus exercising your First Amendment rights,” Olens said.

If someone believes an elected official is advocating for a tax, the agency they report to is the Georgia State Ethics Commission, Olens said.

The attorney general’s office handles sunshine law violations and SPLOST violations where a government has promised to spend the sales tax revenue on one project, but spends it on another.

Another audience member asked Olens what happens when videos that promote a SPLOST are filmed inside a public school. That school’s electric bills are paid for by taxpayers, the questioner said. Or what about using images of a school bus full of children to promote a SPLOST?

Olens said it is difficult to draw a line between education and advocacy.

“If you go to a school email address, and you send to 5,000 constituents, ‘Vote yes on the SPLOST,’ that’s advocacy,” Olens said. “If you do it on your personal email address from your house, that’s not advocacy because that’s the First Amendment right of that elected official. So we all know the wide yes and nos. There’s one heck of a gray.”

The rules are based on Georgia law approved by the General Assembly, not him, Olens said.

“And I would suggest to you that my office has spent a good amount of time — and I’m sure there are numerous legislators that have spent a good amount of time — trying to better divide where advocacy and education collide,” Olens said.

“It is tough. That is just not an easy discussion to put in writing. And that is where you run into the big issue. It’s a tough issue.”

Olens shared with the audience how he handled such cases when he was chairman of the Cobb Board of Commissioners.

“Of course we always took the perspective that anything close we weren’t going to do because we didn’t want the public growling at us,” Olens said. “But having said that it is really tough to find the exact perimeter that divides advocacy from education.”

Saturday’s event was full of notables, among them Bob Barr, who is running to replace Rep. Phil Gingrey (R-Marietta) in the U.S. House as well as two others who are said to be considering jumping into the race: Tricia Pridemore, executive director of the Governor’s Office of Workforce Development, and Majority Whip and state Rep. Ed Lindsey (R-Atlanta).

Former Secretary of State Karen Handel, who is said to be considering a run to replace retiring U.S. Sen. Saxby Chambliss, was present, as were state Reps. John Carson (R-Northeast Cobb), Charles Gregory (R-Kennesaw), Cobb District Attorney Vic Reynolds, Cobb Superior Court Judge Reuben Green, Cobb State Court Judge Marsha Lake, Commissioner JoAnn Birrell and Cobb Board of Education members Tim Stultz and Scott Sweeney, among others.
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Diamond Jim
April 14, 2013
It takes a certain amount of money to run a state and provide services requested (or demanded) by its inhabitants. I grew up in Texas,maintain strong ties there,and thought about going back there to retire. No income tax!! Well, nooo...but sky-high property taxes, sales and other taxes and "fees",and no school property tax breaks for old geezers such as we have in Cobb County. After careful comparison I opted to stay here. And in terms of attracting retirees, lets not forget that Georgia offers a generous exemption on the first "X" dollars of income from retirement and pension plans, Social Security, etc. (See the GA tax code for exact amounts)

I think Sam is probably right--abolishing the tax would be a good thing from a corporate standpoint in that it would do away with special exemptions, protections, and perks, and put everyone on a level playing field. But just remember: If we want and expect government to provide certain services (fire and police protections, roads, public schools, etc.) they have to be paid for, and when the income tax goes other sources of income have to make up the gap.

The folks who would benefit most from no income tax would be those with very high incomes,and businesses, and abolishing it would probably help attract larger numbers of both to Georgia. Those hurt the most by high sales taxes would be lower income families who spend every dime they earn just to stay afloat, and older retirees who already benefit from elder exemptions from state income tax who would break even there, but wind up paying more sales and/or property taxes. (Many counties do not exempt seniors from school district property tax.)
No sales tax nearby
April 09, 2013
States without income taxes do well selling houes on their borders with states having no sales taxes. It's a border game. If we eliminate income taxes, our neighbors will eliminate sales taxes and we will need to expand I-20 west to have a hundred lanes to and from the state line Costco.
Craig Kootsillas
April 08, 2013
States without an income tax are able to rely on income derived from other means -- such as taxes and levies on a natural resource.

Doesn't sound too well thought out to me.
April 09, 2013
Sammy AG 50 sure left Timmy Lee on the short end of the revenue stick they’ll are still uncovering the shell game budget that the great Sammy left he knew the house of cards was going to fall. Yea Texas has lots of gas and oil and they need water as much as Georgia does we don’t won our own water and we are out of it!
Bob Bummer
April 08, 2013
Be careful what you wish for. What happens when a 15% state sales tax does not bring in enough funds to cover even a small states government's expenses during a recession? Will they then create an income tax for only the state's wealthiest and then we have 2 taxes?
April 08, 2013
Get rid of the state income tax and GA will become a destination for retirees. Imagine the revenue for the north GA mountains, plus the Atlanta area.
Just Wait
April 08, 2013
Why is the Attorney General of Georgia even speaking on taxes? Oh, never mind. Forgot all about that Governor thing.
April 08, 2013
Yeah that will work! Get rid of revenue so GA can become a 3rd world country. Did Olens not pay attention in elementary school? Texas is large. Texas has 3 major cities. Georgia has one. Texas has 26 million people. Georgia has 9 million. The sales taxes would have to be astronomical!!! And we don't have the type of wealth here to make up for the difference.
April 08, 2013
The anti-school people (Lambert and the former F&T chair Houston) needs to finally admit defeat and try to find another way to attack our schools and community.
April 08, 2013
This is a regressive tax change. It burdens the poor and enriches the rich. Raising sales tax to 12% in a poor state is clearly a bad idea. Texas has a higher property tax. If Georgia raises its property tax, all those empty foreclosed houses will never be sold.
Pat H
April 08, 2013
Amen to eliminating the state income tax, and eliminate the special SPLOSTS and corporate welfare as well. Oh, stop the flow to the Chamber of Commerce from Cobb's tax coffers.
Bigger Hair
April 08, 2013
Olen is wrong about Texas taxes. The name Texas is an anagram of taxes. There may not be an income tax, but they sure are taxes in Texas. They get you one way or another no matter what they call it.

The real reason business prefers Texas is because the Texan ladies have much bigger hair.

We need to get our big hair back on top of the ladies here and get back in the game.
Lets see
April 08, 2013
After Olens successfully completes phase I, raising sales tax through the roof, he'll say it wasn't his fault the obstructionists blocked the removal of the income tax and it wasn't his fault we ended up with 12% sales tax in addition to the income tax.

After all, only 3% of state income tax is from coporations. The other 97%, income tax from people, is GIVEN to corporations to buy them off for opening up here where we are close to dead last in anything that makes a place attractive to anyone that's not selling cars, car parts, religion or xenophobia (a religion part, look it up)
April 08, 2013
The more money you spend, the more taxes you will pay. So logic says all those rich people that buy all the big ticket items will spend more. Isn;t that what everyone wants? Those evil rich people to pay more taxes?
Dum Dum
April 08, 2013
Only in the Party of Dum would Karen Handel keep turning up. Perhaps as Georgia Republicans all turn back to being Democrats, the Republican party needs somebody, anybody?
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