Sales/income tax swap not as good as it sounds
April 12, 2013 12:00 AM | 1062 views | 2 2 comments | 6 6 recommendations | email to a friend | print

Replacing the state income tax with a sales tax sounds good and it is if you are wealthy and not a senior citizen. If you have a budget and income that allows you to invest or save a significant amount of your income, you will benefit from the proposed change. If not, for the vast majority it will mean you will pay more state taxes.

In my case I would pay more per month than I currently do per year. I am a retired 63 year old and my situation will be typical for retired seniors.

Want to know what it will do for, or should I say to, you? It is very easy. Just look at your current Georgia State Income Tax form and see what the total taxes owed for 2012 were. Under the proposed legislation sales tax would increase somewhere between 3 and 5 percent, though some estimates are that it would actually be greater than 5 percent. We will take the median, 4 percent, and divide the State Income taxes paid for 2012, and the result is the amount of goods and services you could buy per year before you started paying more taxes under the proposed plan.

Example: State Income Tax Paid $350/.04 = $8,750 in annual Goods and Services.

When calculating your annual purchases, be sure to remember gas and utility bills, and don’t forget that Georgia just closed the mail order /Internet sales loophole.

I fear that the “No State Income Tax” mantra will sound so good to the vast majority who will never do the math to see how it will affect them. For those on a tight budget the 3 to 5 percent increase cost of all goods and services to include rent may push them over the financial brink.

Richard Schick

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off balance
April 12, 2013
@Richard Schick

I agree with your analysis. The SPLOST in Cobb end runs the school tax relief that seniors get. The sales tax will wipe out the seniors income tax exemption on state tax. Those who are working and possibly have children in school can only see their wants as they define them. They reach out like hungry politicians , in fact , like Democrats, looking for the dollars to meet their current wants and neglecting the effect on the long term.

An example is "it sounds like's" comment which is pure selfishness, who perceives your letter to be as selfish as he/she is.

When it comes to the time he/she reaches his/her mid 60s and is on retirement income, I am confident he/she will look at the situation with eyes wide open.

A personal observation. In the last 4 to 5 years, I have seen class warfare as I have never seen it in my 80 years on this planet. We have bred a population of entitlement, instant gratification people. It is our own fault. I know I wanted my children to have many things I did not have. It has not worked well.
It sounds like...
April 12, 2013
Another somebody else wanting somebody else to pay the bills...
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