No Vote On Overhaul Of Georgia's Tax System

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ATLANTA - Georgians will not get one step closer to tax reform Wednesday. House and Senate leaders could not reach an agreement on the new sweeping overhaul of Georgia's tax system, so the House adjourned for the day without debating or voting on the measure.

"We have been in negotiations all day with the Senate," House Speaker David Ralston told Channel 2's Richard Elliot. "We continue to be, and it's a process that's obviously taking time."

But House and Senate leaders know there isn't much time remaining to pass tax reform.

The plan calls for a reduction of state income tax from 6 percent to 4.5 percent. However, it also tosses away certain tax deductions and raises the sales tax on things like auto repairs and satellite TV. It does exempt manufacturing and other industries in an attempt to lure jobs to Georgia.

But Democratic leaders balked at the plan, saying when they looked closely at the numbers, they realized it was a tax increase on the middle class. House Minority Leader Rep. Stacy Abrams, D-Atlanta, told Elliot the plan did away with tax credits for Georgia households earning between $46,000 and $180,000 who itemize their deductions.

"The problem is its a tax cut paid by increasing taxes in this middle group," Abrams said.

Ralston said Abrams' concerns had been addressed but wouldn't go into detail about negotiations between the House and Senate. But one source told Elliot the hold up is over what taxpayers will or won't be able to deduct and what will or will not be included in the new sales tax.

The House adjourned for the day. Negotiations will continue and the House could take it up again Thursday.


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