Laffer Watch

The boys a the Patriot Post say keep an eye on Georgia.

Georgia may be on its way to a completely new tax code, courtesy of state House Speaker Glenn Richardson, who proposed legislation this week to completely replace the old code. Currently, Georgia residents pay state and local property tax, estate tax, unemployment insurance and worker’s compensation taxes, business and occupational fees, intangible taxes and insurance taxes. All of that would hit the scrap heap in favor of a flat income tax of 5.75 percent and a matching sales tax. The present income-tax rate is six percent and the sales tax is 4.5 percent.

A familiar name is behind it all, as well: Arthur Laffer, economist of the Reagan era. Richardson has strongly advocated such reform, saying, “We must change the burdensome and antiquated tax system we currently have.” He is optimistic about this plan, which if passed by the legislature will be placed on the November 2008 ballot for voter approval. He says, “I believe the [Georgia] House tax reform plan will be the talk of the nation.” If it stirs up federal tax reform, all the better.

I still say that any income tax is a bad idea, but if it has to exist, it must be flat. The idea of a mix between flat income and a sales tax may just be political genius at work. It’s a giant step in the right direction, and probably an easier sell. Let’s hope for the best.