Looks like the "FairTax" methodology is getting a little traction in GA. Here is an article from the Marietta Daily Journal that descibes elminating the property tax portion of our annual taxation. http://www.mdjonline.com/89/10264980.txt —————————————————————————————————————————————————- Rogers proposal likely to be DOA Friday, July 6, 2007 3:27 AM EDT Georgia legislators are at work on "a major tax overhaul that is designed to eliminate all property taxes in Georgia," says state Sen. Chip Rogers (R-Woodstock), one of the leaders in the Republican-controlled General Assembly. "The tax plan is not in its final form," he told me. "But here are the basics: no property, inventory, boat, auto, etc., taxes any longer. "The revenue would be replaced by raising state sales tax from four percent to five percent and include final retail purchase of all goods and services. In doing so we would eliminate all sales tax exemptions currently in law. "However, every person who files a Georgia tax return would receive a rebate check equal to the average sales tax paid on groceries. This would essentially keep groceries sales tax-free. It is important to note, under this plan, the sales tax is only for final consumption; therefore, businesses would not be required to pay sales tax on inputs."
The current state income tax, which now ranges from one percent to six percent, would be a flat five percent under the proposal outlined by Rogers. The key part of this proposal is the new five percent sales tax on services. The tax would, for example, apply to legal fees charged by attorneys, labor for auto repairs, air-conditioner service, plumbing, haircuts and styling, cosmetology, lawn services, medical services and even funeral costs – among "all sales tax exemptions currently in law," as Rogers said. Specifically, in answer to a question, the senator said: "In the case of an attorney, he or she would apply the sales tax to the final billable amount." Imagine what that would do to those humongous legal bills. For a corporation with a modest $300,000 in legal bills during the year, the five percent sales tax would add $15,000. The impact would be tough on major medical bills. For a surgery and hospital stay costing $50,000, there would be $2,500 added in sales tax. And you know who pays the sales tax – the consumer, the client, the purchaser, the patient and/or the insurer – not the provider of the service.
"The current tax system has many, many flaws, including the tax favored status of services over goods," Rogers said. "We often wonder why we have moved towards a service economy; one reason is its favorable tax status. Ultimately, we need a system that is flat, fair and transparent. The sales tax is all of those." Your columnist suggested if lawyers, doctors and such service providers as grass cutters and beauticians were included, the proposal would be dead on arrival in the General Assembly. "We hope not," Rogers said. "It is our belief that Georgians’ dislike (and rightfully so) of paying a tax (which they cannot control) on privately held property is more than a dislike for paying a sales tax (which they can control) on services. "It should be an interesting debate." You bet. And I still say this proposal will be DOA.
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