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Cracker Squire

THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Sunday, October 01, 2006

Tax-cut claims from gubernatorial candidates draw fire from opposing camps

From The Associated Press:

At a recent "Victory Dinner" with Republican donors, Gov. Sonny Perdue delivered some red meat to fiscal conservatives, announcing his administration has delivered more than $2 billion in tax relief to Georgia citizens.

Perdue's Democratic opponent, Lt. Gov. Mark Taylor, has been touting his own tax-cutting resume, reminding voters how he helped usher in the largest tax cut in Georgia history when he led the fight to remove the state sales tax from groceries.

With state coffers bulging, both candidates are promoting more tax cuts - Perdue's aimed at seniors; Taylor's at homeowners.

Voters love tax cuts. And the pair appear to be vying for the title of Georgia's tax cutter in chief.

But are they grabbing more credit than they should?

An Associated Press analysis has found that the bulk of tax cuts claimed by Perdue's campaign were put in place under the adminstration of Democratic Gov. Roy Barnes, who Perdue defeated four years ago. And Republicans argue Taylor is giving himself too much credit for the end of the sales tax on groceries, instead saying it's then-Gov. Zell Miller who deserves the credit.

A tally provided by Perdue's office lists $2.7 billion in tax cuts during Perdue's four years in office. But 90 percent of those cuts - a little more than $2.4 billion - were enacted before Perdue moved into the governor's mansion.

The largest cut by far is the homestead exemption tax credit, which Barnes enacted in 1999. The property tax relief single-handedly accounts for $2.023 billion of the total cuts.

Another large tax credit included in Perdue's list that predates his election as governor is the $391 million from the phasing out of the estate tax, but that was a change implemented by Congress in 2001.

Probably the most significant tax policy authored by Perdue is the restructuring of the corporate tax. That business-friendly tax cut is expected to be worth almost $1 billion over 10 years but has only begun to take effect.

Democrats point to Perdue's own record on tax increases. Facing staggering revenue shortfalls when he first took office in 2003, Perdue angered fiscal conservatives in his own party when he proposed boosting more property taxes as well as taxes on tobacco and alcohol. Only the tobacco tax hike was enacted, bringing in $676 million since 2003, according to budget documents.

The sniping continues when it comes the candidates' dueling tax proposals.

Taylor has proposed eliminating the state property tax for Georgia homeowners. Republicans are dismissive of the $76 million-a-year plan, saying the savings would only be about $30 per homeowner.

Perdue, meanwhile, wants to end the state tax on retirement income for those 65 and over. Democrats argue an ad he is running supporting the $142 million plan is misleading because it does not make clear that the tax break only applies to retirement income - like pensions - not other wages that senior citizens might earn.

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