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Thursday, March 31, 2011 - 5:05pm

State Tax Reform Plan At Impasse

Updated: 3 years ago.
House Minority Leader Stacey Abrams was the first to point out that the proposed tax reform plan would raise taxes for middle-income residents. Abrams, a Democrat, has worked as a tax attorney. (Photo - Georgia General Assembly)

State lawmakers are at an impasse over a tax reform plan. And they have decided to take another week to resolve their differences. They will reconvene after Spring break and take up the issue again, in an attempt to break the impasse.

Legislators have been battling much of this week over whether a proposed tax reform plan would raise taxes. House leaders have also indicated that a leadership crisis in the Senate has played a role in the holdup.

The plan the Republicans proposed would reduce the state income tax from 6 percent to 4.5 percent. But it also would eliminate some deductions for charitable donations, and add taxes on auto repair and telecommunication services.

Democrats say the plan would cut taxes for people with lower incomes, and the wealthy, but not the people in between. House minority leader, Rep. Stacey Abrams, brought this to the attention of Republican lawmakers at a committee meeting Tuesday afternoon. The committee, nonetheless, approved the plan and expected a House vote on Wednesday.

But Republicans were forced to agree with Abrams late Wednesday evening.

“As Rep. Abrams pointed out, there was a gap of people in there that were going to have tax increases," said Senate President Pro Tempore Tommie Williams of Lyons, a Republican. "And we’re not about putting tax increases on middle incomes so we’re making some changes so that that bracket of people would not be incurring tax increases.”

Rep. Larry O’Neal of Bonaire, the House majority leader, said since then, lawmakers have been running the numbers to ensure every resident gets a tax cut.

“So many different circumstances exist with literally almost every single Georgian," he said, explaining the holdup. "We had four million tax filers in 2005, and you almost have to run four million scenarios.”

Republicans announced last year that they wanted to rewrite the state’s tax code. But they've rejected most of the proposals that the tax council they formed suggested. Most notably, they scrapped a proposed grocery sales tax.

Late Thursday, Speaker of the House, David Ralston, a Republican, said it would be helpful if Senate Republicans clarified their leadership structure. He said "their little experiment" was preventing legislators from moving forward with the tax reform plan.

After being sworn in in January, Republican senators abruptly stripped Lieutenant Governor Casey Cagle, also a Republican, of the power to make committee member assignments. Instead, they decided that those assignments would be made by a committee of eight Republican Senators.

The legislature was set to convene on Friday. But late Thursday they cancelled Friday's session, and instead decided they would return a day early from Spring break and reconvene on April 11.

The House and the Senate will need to approve the tax reform plan by April 14 when this year’s legislative session ends.

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