Many policymakers talk the talk when it comes to tax reform, but they can’t seem to walk the walk. A notable exception is Senator Chip Rogers. Over the last several years, as many states have raised taxes, there were serious efforts in Georgia to reduce the state’s tax burden. These efforts happened in part because there are policymakers in Georgia who understand that lower tax burdens yield growth in population, jobs, and the economy. Senator Rogers, who represents Georgia’s 21st District and serves as the Majority Leader, is one of those policymakers. He was one of the leading proponents of a recent effort to reduce the tax rate on capital gains and eliminate the net worth tax, which would have gone a long way in improving the tax burden in Georgia.
Earlier this year, State Representative Tom Graves introduced HB 1023, a bill to cut the capital gains tax rate in half and eliminate the net worth tax, among other pro-economic growth tax provisions. The bill passed the Georgia House and Senate the previous year, but Governor Sonny Perdue vetoed the bill. After Graves resigned from the House to wage a successful campaign in a special election to Congress, Senator Rogers took up the mantle of tax reform and pushed for HB 1023’s passage in his chamber.
As a small business owner, Rogers understood that a 50% cut in the capital gains tax rate would provide much-needed tax relief to individual taxpayers and small businesses, and actually provide more money to the State Treasury. As NTU pointed out in a letter supporting the bill, the last five reductions in the federal capital gains tax all increased the federal government’s revenue. Furthermore, by reducing the capital gains tax, Georgia would be a more attractive option for investment, as neighboring Florida and Tennessee don’t tax capital gains.
Additionally, the net worth tax was costing Georgia’s businesses $31 million in taxes per year on top of the state’s corporate income tax, contributing to a slow migration of economic activity (and with it jobs and revenues) to neighboring states. Rogers knew that elimination of the net worth tax would allow businesses to invest that money into their operations and stimulate Georgia’s economy.
After a marathon of negotiations, Rogers helped secure passage of the bill in the Senate by a vote of 33-13. For its part, the House passed the bill 154-8. But earlier this week, after the House and Senate adjourned, Governor Perdue again vetoed the bill. This is unfortunate because after more than two years of high unemployment, Georgia could use real tax relief to spur job creation and economic growth. All that Georgians can hope for now is that Senator Rogers and others like him will continue to push for efforts to reduce the tax burden and grow the economy. We’re hopeful that they will.