ATLANTA – The tax cuts President Donald Trump steered through Congress in 2017 will save the average Georgia household more than $39,000 over their lifetime, a new study has found.
But according to another broader study of tax cuts in multiple countries going back to 1965, tax cuts provide a huge windfall to big corporations and wealthy individuals without producing long-term economic growth or sustained business investment.
A study released this month by Boston University professor Laurence Kotlikoff to coincide with the third anniversary of the Trump tax cuts comes on the heels of an earlier study by the Federal Reserve Bank of Atlanta that estimated the gain for Georgia families at $22,676 on average because of the impact of personal income tax reductions.
The new study, funded by the Goodman Institute for Public Policy Research, a free market think tank, includes the effect of reducing corporate taxes.
Lower corporate tax rates attract capital from abroad, raise wages and create greater economic expansion in Georgia and in other states, said John Goodman, the institute’s president.
“We used to have one of the highest corporate tax rates in the world,” Goodman said. “High corporate taxes drive capital offshore and that’s bad for American workers. With the lower rates we have now, we are more competitive.”
The Goodman Institute study comes as President-elect Joe Biden prepares to roll back the Trump tax cuts benefitting the wealthiest Americans and businesses. However, the Democrat has vowed not to raise taxes on Americans earning less than $400,000 a year.
Tax policy also has been issue during Georgia’s two U.S. Senate runoff races, with Democratic challengers Jon Ossoff and Raphael Warnock opposing the Trump tax cuts and incumbent Republican Sens. David Perdue and Kelly Loeffler pledging to preserve them.
The Goodman Institute study shows that many Georgians would be better off in the short run if Biden’s economic plan is adopted in full. That’s because of Biden’s proposal for a more generous child tax credit and more generous benefits for low-income seniors.
But Goodman said the Biden plan comes with long-term costs.
“When today’s children become adults, their wages will be lower and the economy will be less prosperous because of the way these benefits are funded,” Goodman said.
The broader study, conducted by the London School of Economics, concluded tax cuts lead to greater income inequality but have no meaningful impact on unemployment or economic growth.
The study examined five decades of tax cuts in 18 wealthy nations from 1965 to 2015, including two Reagan-era tax cuts in 1981 and 1986, which dramatically reduced the top income-tax rate from 70% to 28%.
The study found that tax cuts promote income inequality. The share of national income flowing to the top 1% increased by about 0.8%.
While employment and economic growth fluctuated slightly following major tax cuts, the report found the impact statistically indistinguishable from zero.
The study’s authors, David Hope and Julian Limberg, concluded that the momentum behind enacting tax cuts comes from the power of wealthy corporations and individuals to set public policy agendas.
“There is a large political science literature on the power of rich voters and organized business interests to shape public policies in their favor,” Hope and Limberg wrote.
ATLANTA – Georgia Sen. Ben Watson doesn’t care whether the Peach State observes standard time all year or daylight saving time.
Watson, R-Savannah, a physician, just wants Georgians to pick one or the other because studies show switching back and forth every six months causes heart disease and sleeping disorders.
“I prefer either way,” he said. “Let’s quit changing it.”
Watson pre-filed two bills this month, one calling for a nonbinding advisory referendum asking Georgians whether they would rather the state observe standard time all year, daylight saving time all year, or whether they would rather continue switching between the two.
Under the other measure, Georgia would observe standard time all year, bypassing a referendum.
A third bill pre-filed this month by state Rep. Wes Cantrell, R-Woodstock, calls for observing daylight saving time all year.
The Senate passed legislation introduced by Watson last March calling for a nonbinding referendum on the issue. But the General Assembly shut down for three months shortly after that vote due to the coronavirus pandemic, and the measure died in the Georgia House of Representatives.
“It just got caught up in the pandemic, and I didn’t press it,” Watson said.
Only two states – Hawaii and Arizona – remain on standard time all year, as do the overseas U.S. territories of Puerto Rico, American Samoa, Guam, the Northern Marianas Islands and the U.S. Virgin Islands.
Any state wishing to observe daylight time all year must seek congressional approval.
“My gut is most people would like to go to daylight time all the time,” Watson said. “It may be better to put it on the ballot and see if we can get some consensus.”
Supporters say sports betting could regenerate interest in pro sports at a time COVID-19 has emptied the stands.
ATLANTA – Advocates for bringing legalized gambling to Georgia will be back under the Gold Dome next month, pitching the financial benefits of casinos, horse racing and sports betting together and separately.
But a betting man might give legislation authorizing online sports betting in the Peach State the best odds to advance.
“It’s the easiest one to pass,” said Georgia Rep. Ron Stephens, R-Savannah, chairman of the House Economic Development & Tourism Committee. “It clearly does not require a constitutional amendment. … It’s just a matter of us giving the [Georgia] Lottery Commission direction and authority they already have.”
Efforts going back the better part of a decade to legalize casino gambling and pari-mutuel betting on horse racing in Georgia have been unable to muster the two-thirds majorities in the state House and Senate required to approve constitutional amendments and put them on the statewide ballot.
Supporters say sports betting, on the other hand, would only require simple majorities to get through the two legislative chambers because it could be accomplished simply by amending the law that created the Georgia Lottery during the 1990s.
Sports betting also enjoys the advantages of being a relative newcomer to the debate, having been taken up in the General Assembly for the first time during this year’s session. Lawmakers haven’t had time to grow tired of talking about it.
Sports betting has the backing of Atlanta’s four professional sports teams – the Braves, Falcons, Hawks and Atlanta United – which formed a coalition last winter to lobby on the legislation’s behalf.
The teams are counting on sports betting as a way to generate more fan interest, particularly at a time when they have had to shorten seasons and limit attendance because of the coronavirus pandemic.
“Increasingly, the cellphone is the primary means of entertainment for younger fans,” said Billy Linville, spokesman for the Georgia Professional Sports Alliance. “[The teams] have to engage them or they’ll go elsewhere.”
Some new ammunition the sports alliance will bring to the 2021 debate is the revenue numbers sports betting is generating in the nearly two dozen states where it’s legal.
In Tennessee, online sports betting produced $131.4 million in wagering last month – an average of more than $4 million per day – after legislation legalizing sports betting took effect Nov. 1.
In 2019, the first full year of sports betting in New Jersey generated $4.55 billion in wagering, with more than $3.8 billion bet online.
Legislation backed by the sports alliance to be introduced into the General Assembly this winter will call for dedicating 20% of the proceeds from sports betting in Georgia to the HOPE Scholarships program.
The lottery-funded HOPE program covered the full tuition costs of eligible Georgia high-school students until 2011, when then-Gov. Nathan Deal pushed a cut in benefits through the General Assembly to keep the program solvent amid rising student enrollment and the increasing costs of tuition.
“We’ve got the COAM [Coin-Operated Amusement] Machines and the lottery drawings producing more than $4 billion [a year] in revenue, and it’s not able to completely fund the HOPE scholarship anymore,” said state Sen. Brandon Beach, R-Alpharetta, who has been the legislature’s leading champion of horse racing. “We’re going to have to find different revenue sources.”
Other lawmakers are advocating other uses for the state’s share of legalized gambling proceeds.
Rep. Alan Powell, R-Hartwell, chairman of the House Regulated Industries Committee said he’d like to put the revenue generated by casinos in Georgia toward “the No.-1 hole in the [state] budget: health care.”
House Democrats have expressed an interest in setting aside a portion of the state’s share of gambling proceeds for low-income families that can’t afford to cover the funding gap the 2011 cuts to the HOPE Scholarship opened up in the program, or for a new scholarship program to help young Georgians pay off their student loans.
Besides the financial argument, supporters of legalized gambling also argue that illegal gambling is generating billions of dollars in Georgia without the state seeing any benefit.
“All we’re going to do is capture the tax,” Stephens said.
“It’s time to bring it out of the darkness and into the light,” Linville added.
But Sen. Bill Cowsert, R-Athens, chairman of the Senate Regulated Industries and Utilities Committee, said competition for Georgians’ limited entertainment dollars from legalized sports betting, casinos or horse racing could hurt the lottery program’s revenues.
Lawmakers also should consider how casinos, racetracks and/or online sports betting available at the fingertips might affect problem gamblers and their families, he said.
“We need to make certain we educate the gamblers what the risks are … and do something to make sure they don’t hurt themselves,” Cowsert said.
The 2021 version of the legalized gambling debate should kick off early. Backers of all three options – sports betting, casinos and horse racing – say they plan to pre-file legislation during the first week of January. The 2021 session begins Jan. 11.
ATLANTA – First-time unemployment claims increased in Georgia last week as the state Department of Labor began working to implement the new economic stimulus package Congress passed this week.
Initial unemployment claims totaled 26,673 last week, up 2,971 from the work before, the labor department reported Thursday.
Meanwhile, Commissioner of Labor Mark Butler warned that fully implementing the provisions of the new bill will be slow going, and that’s if President Donald Trump even signs it into law. Trump is threatening to veto it because it includes $600 weekly stimulus checks for Americans rather than the $2,000 checks he supports.
“Some of the provisions included in the bill should be able to be implemented fairly quickly,” Butler said Thursday. “However, most of the new additions in the bill are going to take a substantial amount of time due to their very complicated nature.
“These new enhancements could take months of system development to implement along with the other changes that we will have to program.”
If the president does not sign the bill, all federal unemployment insurance programs created last March as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act will end on New Year’s Eve. The last week payable ends on Dec. 26 for individual-filed claims and on Dec. 30 for employer-filed claims.
If Trump does sign the legislation, federal guidelines must be established by the U.S. Department of Labor before states can determine the timeline for delivering the benefits to Georgians. The guidelines are not expected before the first of the year.
Even before the uncertainty over the new stimulus bill, unemployed Georgians have been complaining over delays in processing claims under the current system, with the labor department overwhelmed with an unprecedented number of claims sparked by the pandemic’s impact on the economy.
“We’re seeing incredible delays with making determinations on claims,” Lisa Krisher, director of advocacy for Georgia Legal Services, said this week during a hearing held by the state House Democratic Caucus’ Subcommittee on COVID-19. “You can’t get anyone on the phone at the labor department to explain what’s going on.”
Krisher said the online appointment scheduling system the labor department set up during the fall has helped some, but claimants still are having a hard time getting answers when their claims are delayed or denied.
Since the pandemic exploded in Georgia last March, the labor agency has paid out more than $16.6 billion in state and federal unemployment benefits to nearly 4.2 million Georgians, more than the last nine years combined.
During the week ending Dec. 18, the job sector accounting for the most initial unemployment claims in Georgia was accommodation and food services with 6,941 claims. The administrative and support services sector was next with 2,880 claims, followed closely by manufacturing with 2,481.
More than 161,000 jobs are listed online at EmployGeorgia.com for Georgians to access. The labor department offers online resources for finding a job, building a resume, and assisting with other reemployment needs.
ATLANTA – The Small Business Development Center at the University of Georgia will offer free online seminars next week to update business owners on the $900 billion coronavirus relief package Congress passed this week.
The Coronavirus Response and Relief Supplemental Appropriations Act includes $284 billion for a new round of small business loans through the Paycheck Protection Program (PPP). Within that appropriation is $15 billion targeted specifically for live performance venues, independent movie theaters and other cultural institutions that have experienced revenue declines of at least 25%.
The package also includes $20 billion in grants through the Economic Injury Disaster Loan (EIDL) program, which provides targeted aid of up to $10,000 per applicant based on the number of employees. The first COVID-19 relief legislation Congress passed last March also contained $20 billion, but those funds ran out in less than four months.
The one-hour seminars will take place Dec. 29 at 10 a.m. and Dec. 30 at 10 a.m. and 2 p.m. Also available on demand will be a session that was pre-recorded on Wednesday and reflects the most up-to-date information available at the time of the recording.
Registration information can be found on the Small Business Development Center’s website at www.georgiasbdc.org.
One important caveat is that President Donald Trump has yet to sign the legislation. He has threatened to veto the bill because it doesn’t provide enough direct relief to Americans.
The legislation offers $600 stimulus checks to most Americans, while Trump is calling for $2,000.
