Georgia Senate wants to cut income taxes

ATLANTA - Income tax or car tax?<br /> <br /> Senate Republicans on Tuesday debuted a proposal to lower the state income tax for Georgians by 10 percent over five years. The late entry into the tax debate at the state Capitol created immediate friction with the House GOP, which has already ushered its own plan through that chamber to wipe out the car tax.<br /> <br /> With the state's economy sputtering, Gov. Sonny Perdue has expressed misgivings about the House plan because it would tear a $660 million hole in the budget once it's fully implemented in two years. His office had no immediate comment on the Senate plan, which would cost the state a whopping $1.2 billion a year when it's fully phased in by 2013.<br /> <br /> Lt. Gov. Casey Cagle said the proposal would provide broad-based relief to every Georgian earning a paycheck. He added it would begin to kick in almost immediately, providing a boost for the sluggish economy.<br /> <br /> "It is equitable to all. And I will tell fundamentally that I believe that every dollar that government puts into an individual's pocket helps the economy," Cagle said.<br /> <br /> House Republicans were unimpressed. They moved quickly to question the Senate's timing in introducing a plan as the legislative session heads into its final days and suggested it could be intended as a "poison pill" for the House proposal.<br /> <br /> "It was obviously a hastily put together tax plan," House Majority Leader Jerry Keen said Tuesday.<br /> <br /> Just last week the House GOP pushed through a resolution that would amend the constitution to erase the state's car tax, which comes due every year on a vehicle owner's birthday. It would also cap the rate by which property taxes could rise and eliminate the state portion of property taxes, worth about $30 a household.<br /> <br /> House Speaker Glenn Richardson was testifying before a Senate panel on his plan Tuesday but the lawmakers put off a vote, leaving the hearing to take the wraps off their own alternative instead.<br /> <br /> Keen said while the Senate plan just tinkers with the income tax withholding rate, the House plan takes two assets - the car tax and state property taxes - off the tax rolls forever.<br /> <br /> "It's easy to understand," he said.<br /> <br /> Senate Republicans argued the income tax cut was the way to go.<br /> <br /> "It's a proven record that the economy will recover faster and grow further with an income tax cut than any other kind of tax cut," Senate President Pro Tem Eric Johnson said.<br /> <br /> If it passes the Legislature, income tax withholding would be adjusted downward beginning in July. It would provide $215 million in tax relief in the first year.<br /> <br /> Cagle said he did not have an estimate on how much the savings would mean for the average Georgian, saying it would vary by income. Those who earn more would save more under the plan.<br /> <br /> The battle over which tax to cut has echoes of last year's GOP family feud. Richardson and Perdue squabbled over a House proposal to provide a one-time property tax refund to Georgia homeowners. Perdue vetoed the refund, arguing it was fiscally irresponsible.<br /> <br /> This year they'll be anxious to deliver something. State lawmakers are up for re-election in November.<br /> <br /> ---<br /> <br /> Georgia General Assembly: http://www.legis.ga.gov

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