There we were, cruising toward a gubernatorial election in which the two leading candidates tried to outbid the other on school spending while talking up their fiscal conservatism, when a statistic got in the way.
The intriguing thing about Georgia’s tumble down the jobless-rate rankings isn’t that Jason Carter’s campaign has jumped on it; that’s only natural. It’s the way the suddenly intense focus on the economy is getting at the core governing philosophies of the right and the left.
And in turn, it’s the way Carter, a self-proclaimed fiscal conservative, has to thread the needle of saying he won’t raise taxes while so many of his supporters suggest Georgia’s problem is it doesn’t tax and spend enough.
Thus does this election threaten to become something that may not work to Carter’s favor: a referendum between the low-tax, small-government conservatism preached by Republicans, and the high-tax, growing-the-public-sector leftism of the modern Democratic Party.
Carter can try to tamp down the tax-hike talk all he wants. No one believes he can raise school spending dramatically and expand Medicaid and avoid raising taxes substantially. His critics on the right certainly don’t buy this. Nor do those on the left who would howl at the budget cuts needed elsewhere to pull off such a trick.
And so these folks on the left are turning the discussion into one about the alleged failure of conservatism, as evidenced by Georgia’s economic shortcomings. While Georgia’s economy certainly ought to be performing better, it’s quite a stretch to say our problems are caused by a strict adherence to conservatism.
Consider a few basic principles:
— The tax burden should be as low as possible. Yes, state taxes represent a smaller share of per capita GDP in Georgia than any other state (using fiscal 2011 figures, the latest available). But our state also leaves more funding of government to the local level than all but five other states. So, the truest comparison considers state and local taxes. Combined, this burden on Georgians is 35th-highest, not 50th, and above a lot of other red states.
And after adjusting for inflation, the amount of state and local taxes paid by the average Georgian from 2003 (our first year with a GOP governor) through 2011 was actually 2 percent higher than in the nine years before that.
— Taxing consumption is preferable to taxing income. Taxing income makes it harder to save and invest, whereas taxing consumption encourages saving and investment. Yet, income taxes still represent a larger share of Georgia’s general state revenues than consumption taxes — by an average of $2 billion per year in recent years.
— Tax rates should be low and the base broad. Georgia’s top marginal income-tax rate was 6 percent before the GOP took over. It’s 6 percent now. The difference is a few states have lowered their rates below ours during that time. What’s more, tax cuts in Georgia have tended to carve out more exceptions rather than broadening the base.
In some ways, this isn’t a comfortable discussion for Republicans either. But it’s the discussion Georgians need.