Tax Aspects of the Georgia Gubernatorial Election

In a year where Georgia has seen 10% (and higher) unemployment and Social Security recipients are facing their second consecutive year without a cost of living increase, the prospect of even the slightest tax increase can ignite a heated discussion. As a tax accountant for more than 20 years, I have not seen a level of anxiety such as I have seen this year. Georgians have watched taxes increase as government services have dwindled.

In reviewing candidate websites, watching a locally held debate, and speaking to Nathan Deal at a candidate forum held in Columbus, Georgia, here is a summary of where the candidates in the Georgia governor's race appear to stand on the issue of taxes.

One proposal to boosting Georgia's ailing revenue stream is the reinstatement of the state sales tax on food items. While county tax is still levied on food purchases, Georgians do not pay the 4% state sales tax on groceries. For those like me who live in Henry County, that relates to a 3% tax on my food purchases rather than the 7% I pay on all other taxable purchases.

If we can believe the gubernatorial candidates, this issue should be a mute point after the election. Both Democratic candidate Roy Barnes and Republican candidate Nathan Deal emphatically stated that they would not support the reinstatement of the state sales tax on food during a recent debate moderated by WXIA-TV, the Atlanta NBC-affiliate television station. At that same debate, Libertarian candidate John Monds answered "maybe." However, with an 11Alive and V-103 radio poll currently showing Monds with 8% of the vote, behind Deal's 49% and Barnes' 39%, the probability that he will have a say in the matter is slim.

Early in Deal's campaign he outlined his tax considerations should he win the governor's seat on November 2. His proposals include:

Eliminating the marriage tax penalty. This relates to the state's income tax system. As in the federal system, married couples pay more than single taxpayers earning the same income.

Exempt qualified small business from Corporate Income Taxes. Deal proposes a 10-year waiver of state corporate income taxes for small business start-ups. Deal hopes this will stimulate entrepreneurship and bring more jobs to Georgia.

Eliminate the net worth tax. Deal proposes to eliminate the state tax on corporate net worth, which he feels "penalizes growth and development of wealth in Georgia." Deal suggests that this small loss in state income will soon be replaced by the additional revenues generated as corporations move to the improved business landscape Georgia will create.

Eliminate the business inventory tax. According to Deal, Georgia is one of the few states in the southeast that taxes a business' inventory. This encourages even Georgia-based corporations to house their inventory out of state.

Reduce corporate income tax. Deal supports reducing the state's corporate income tax to 4%. Combined with his other proposals for restructuring the state's corporate income tax structure, Deal believes this reduction is necessary to move Georgia towards becoming a business-friendly state that will attract much need employment opportunities.

Americans for Tax Reform administers a Taxpayer Protection Pledge. Candidate Deal has signed the pledge, assuring the public that he will "oppose and veto any and all efforts to increase taxes under his leadership." He is the only candidate for Georgia governor to do so.

Barnes' website indicates he would recommend the reinstatement of Georgia's homestead exemption to reduce property taxes for Georgians. During the debate, Barnes insisted that he does not support tax increases, and, in his previous single term as governor, never sent a tax bill to the legislature. Barnes, however, further suggested that limited-interest tax benefits, primarily negotiated by high-paid lobbyists for specific interests, must be eliminated in order to pay teachers and other public servants currently experiencing furlough days, income freezes, and layoffs.

More from this contributor:
Georgia Needs to Collect Current Sales Taxes Before It Considers Raising Taxes
Georgia's Gubernatorial Candidates Invited to Columbus State University
Georgia's HOPE Scholarships in Jeopardy