Republicans in the George legislature have turned to one of the architects of President Ronald Reagan's tax-cutting efforts as they consider reforming Georgia's tax code.
Georgia House Speaker Glenn Richardson is using private funds to pay consultant Arthur Laffer, is best known for convincing President Reagan to cut income taxes in hopes of spurring the economy and ultimately boosting tax revenue (which, by the way, worked in spades). Richardson says Laffer's firm, Arduin, Laffer & Moore, will be asked to analyze every government system in the state and consider how to raise revenue using other taxing mechanisms.
From the Associated Press news report:
"Our tax system is burdensome and antiquated, and it's time to take a look at fixing it," Richardson said at the annual Georgia Chamber of Commerce legislative breakfast. "It's been over 100 years since anyone has done this."
Laffer is famous for creating the Laffer Curve to demonstrate the supply-side economics model that suggests that tax cuts can sometimes pay for themselves by enabling greater economic growth. Wikipedia has a very good entry on Laffer.
The AP reports that Laffers' fees - an initial $50,000 and a monthly fee yet to be negotiated - will be funded through the MMV Alliance Fund, a political committee based in Richardson's law office that collected $452,000 last year from lobbying groups and corporations, according to campaign finance reports.
The Georgia Democratic Party is clearly worried, charging that by hiring Laffer House Republicans are signaling they are leaning toward increasing the state sales tax, because Laffer tends to support shifting the tax burden away from property or income taxes.
Richardson says he wants a top-to-bottom review of Georgia's tax code, and that he is open to considering proposals to end the state's income tax or move to a flat tax.
If either of those happens, you should watch for a ripple effect on politics nationally.
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