Georgia lawmakers began a review of state tax breaks Wednesday, with some leaders hoping to reduce breaks to lower the state’s overall income tax rate, while other officials said business tax breaks are important to recruiting industry.
The Joint Tax Credit Review Panel has been years in the making, pushed for by Senate Finance Committee Chairman Chuck Hufstetler, a Rome Republican who is a sometime-skeptic of tax breaks. The work could lead to legislation next year.
Lt. Gov. Burt Jones, also a Republican, has backed the review with hopes that more limited tax breaks might aid in his goal of lowering or eliminating the state income tax.
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Jones described himself as “a big proponent of giving every company and family a tax break” in a Wednesday phone interview.
“In order to do that, you’ve got to always be assessing what you’re doing and make changes when things don’t make a whole lot of sense,” Jones said.
But almost every tax break, down to the one that says commercial fishermen don’t have to pay sales tax on crab bait, has its defenders. The large capitol hearing room that the review panel met in was filled with dozens of lobbyists, keeping an eye on their clients’ preferred incentive.
Testimony showed the wide gap in viewpoints. Jeffrey Dorfman, the state economist, echoed the view of many economists that incentives should be narrowly targeted.
“Tax credits should be used sparingly and for targeted opportunities only,” Jeffrey Dorfman, the state economist, told lawmakers. “Once a key industry is attracted, you don’t want to subsidize suppliers or follow-on investments, right? If you took a loss upfront, now we need to get those gains later.”
But Andrew Capezutto, the chief administrative officer and general counsel of the Department of Economic Development, which recruits businesses, said the predictability of an incentive system that doesn’t change is valuable to businesses and that…
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