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Tuesday, March 29, 2011 - 10:47am

Tax Reform Vote Pending

A legislative committee approved a tax reform plan that would lower the income tax rate and leave groceries untaxed.

The new plan would lower the state income tax rate to 4.5 percent. And it would levy new taxes on car repair, car sales between individuals and some telecommunication services.

Legislators have largely rejected the suggestions of a tax reform council that state Republicans formed last year. For instance, they scrapped an idea to reinstate a grocery sales tax.

It’s still unclear if the plan would reduce or increase state tax collections. House majority leader, Republican Larry O’Neal, says legislators are rushing to figure that out.

“Time is of the essence," O'Neal said. "There were people here literally almost all night last night – a lot of number crunching. And I don’t think we’re there absolutely yet."

Republicans say the reduction in income tax will make Georgia more competitive with other states.

But House Democrats have opposed the plan, saying it would unfairly tax the middle class. They also say the plan is complex, and there’s not enough time to evaluate it before the session ends April 14th.

Democrat Carolyn Hughley of Columbus is the House minority whip.

“The fact of the matter is there are going to be winners and losers," she said. "And the bottom line is the people of Georgia are going to lose because they are going to have additional taxes every time they get their oil changed, every time they do anything with their car.”

State lawmakers only have five working days to vote on the plan before this year’s legislative session draws to a close. The House could vote on the measure as early as Wednesday. Then it would move to the Senate for a vote.