Fresh Loaf

Gov. Sonny Perdue last week irked many fellow Republicans when he vetoed a bill that would have slashed the state capital gains tax. Critics warned the bill would have cost the cash-strapped state between $340 million and $1 billion in lost revenues.

“I’m scratching my head…If I were the governor, I would have said, ‘Where is that? Let me get my pen.’”

— House Rules Chairman Earl Ehrhart, R-Powder Springs, in the May 11 AJC

“Cutting capital gains taxes would have encouraged more investment into the state. It is a sad day when this type of legislation gets vetoed by a Republican governor.”

— State Insurance Commissioner and GOP gubernatorial candidate John Oxendine in a May 11 press release

“If Governor Perdue vetoes it, I hope legislators will consider overturning his veto. The JOBS Act could do a lot of good for Georgia.”

— David Raynor of the Georgia chapter of the National Federation of Independent Business

“Republicans I talked to in the legislature are angry and demoralized.”

— Pro-growth, anti-tax Wall Street Journal columnist Stephen Moore, writing about Perdue’s veto

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“Georgia Budget Raises Taxes on Middle-Income Families to Pay for Capital Gains Tax Breaks for Wealthiest Investors”

That’s the heading of a report issued today (PDF) by the Institute on Taxation and Economic Policy, a Washington D.C-based think-tank. The tax increase it mentions is the elimination of the state homeowners tax relief grant, which will cost Georgians about $430 million a year. On the other hand, the capital gains tax break, passed in the waning hours of the General Assembly, is expected to spare well-heeled taxpayers an estimated half-billion dollars a year.

Here’s ITEP’s final analysis:

“Georgia lawmakers have sent Governor Perdue a budget that dramatically shifts the cost of funding public services away from the wealthiest Georgia taxpayers, and further burdens middle- and low-income families,” said ITEP director Matthew Gardner. “While paring back the HTRG could play a constructive role in helping to balance Georgia’s budget in a fair and sustainable way, the legislature’s decision to cut capital gains taxes for upper-income taxpayers makes the state tax system even more unfair.”

ITEP is a non-profit, non-partisan research and education organization that works on government taxation and spending policy issues. So says its online literature. I’m guessing, however, from its list of board members – Robert Kuttner, founding editor of The American Prospect; Robert Reich, secretary of labor under Clinton; and a California union head, among others – that’s its likely considered a left-leaning organization.

Still, just because the group has a political POV doesn’t mean what it says ain’t true.

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