Why should Georgians give corporations — including many headquartered in other states and countries — a special tax break during a recession when the state cannot afford to pay for our schools, state parks, courts and child abuse protection workers, among many, many other vital services?
That is just what House Bills 998 and 1023 propose to do. HB 1023 passed the House Small Business Development and Job Creation Committee, while HB 998 remains in the House Ways and Means Committee.
More than half of corporations pay just the minimum for the corporate net worth tax — only $10. Georgia faces a $4.6 billion deficit and our recovery is going slowly. Every single dollar counts, including the $30 million from this tax.
There is no evidence that ending this tax will entice businesses to come to Georgia, nor make up for the lost revenue. If the tax is a nuisance for businesses, then lawmakers should make common sense reforms, such as changing to a single sales apportionment formula to match the corporate income tax returns.
However, if lawmakers want to eliminate the corporate net worth tax entirely, they should do so responsibly. Georgia must have a balanced budget, therefore, if lawmakers enact this tax break, they should balance it with a $30 million increase in revenue. Or, perhaps, they should cut special interest business tax breaks worth $30 million already in the tax code to offset the lost revenues.
Better yet, lawmakers should tackle the main problem and comprehensively reform the tax system to ensure adequate funds for our public services, improve fairness among taxpayers, ease administration and increase the state’s financial stability. Sarah Beth Gehl is the deputy director of the Georgia Budget & Policy Institute, an independent, nonpartisan think tank that analyzes the state budget.