Sonny Perdue is enjoying his last year as the Governor of Georgia and all signs indicate that he's going out with a bang that, depending on how he uses his veto pen, could have enormous implications for Georgia's tax system and revenue stream for years to come. The Governor has already signed legislation that removes retirement income from the income tax base and repeals the state portion of the property tax. Tax and budget fairness advocates are watching to see what action he'll take on a capital gains tax cut and a proposal that would eliminate the refundable portion of a low-income tax credit.

Last week, Governor Perdue made good on a campaign promise to entirely remove retirement income from the tax base for seniors. Georgia seniors already enjoy some of the highest exemptions in the country on retirement income. Fully exempting this income, especially as the boomer population ages, means that the cost of this legislation will only grow in the future.

But even if one can (for some reason) ignore the fiscal implications, the fairness implications are eye-popping. Under this legislation, income seniors receive from work would continue to be taxed the same as before. If you're a senior who can't afford to retire, you still get taxed on most of your income (seniors would still get the existing $4,000 exemption on earnings). But if you can afford to retire, your income is not taxed. The most basic principle of tax fairness — that taxes should be based on ability to pay — seems to have disappeared in Georgia.

The Governor also signed a law that completely eliminates the state portion of property taxes. The Georgia Budget and Policy Institute estimates that this cut alone will cost the state $63 million in 2013, with the cost increasing each year.

Once again, the idea that taxes should be based on ability to pay would justify very different measures. For example, if policymakers are truly concerned about the impact that property taxes are having on the state's most vulnerable residents, they should just institute a property tax circuit breaker, rather than eliminating the tax altogether.

Governor Perdue may not be done yet. Two new bills currently sitting on the Governor's desk would be even more regressive.

The first one is HB 1023, the so-called JOBS Act, which would allow individuals to exclude 50 percent of their capital gains from their income when the state's rainy day fund reaches $1 billion. An ITEP analysis found that "low- and middle-income families would see virtually no benefit from the new exclusion for capital gains." In fact, those Georgians who would benefit from this tax change are overwhelmingly in the top five percent of the income distribution.

Second, the Governor will decide whether to remove the refundable portion of the state's Low Income Tax Credit (LITC). Currently, the credit is available to Georgians with incomes less than $20,000, and if the filer's tax credit is larger then their tax bill, then they get a small refund of between $5 and $26 dollars (or more, depending on family size).

As Laura Lester from the Atlanta Community Food Bank wrote in the Atlanta Journal Constitution, "While eliminating the refundable portion of the LITC may appear to be a simple line-item adjustment, the result will increase the tax burden on those who struggle most in the current economy. This will have consequences well beyond the budget. The current recession has reduced work hours and wages for hundreds of thousands of Georgians, and the LITC helps to ease this hardship and stabilize incomes."

Slashing a tax credit for low-income families while offering enormous tax cuts for the wealthy investor class seems like a strategy to confirm the most cartoonish stereotype of right-wing lawmakers that can be imagined. Let's hope this is not the legacy Governor Perdue prefers to leave for his state.

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