Tax policy a balancing act

November 02, 2008 06:11 pm

— We rarely see a tax cut we don’t like and in principle the freeport tax exemption being voted on in Whitfield County on Tuesday is a common sense proposition.
We support its passage, but with strong reservations.
The government beast is ravenous. Every year it demands more money to fund “vital” spending projects and all kinds of services “we just can’t do without.”
If it passes, the freeport exemption will reduce the amount of tax money generated by local business and industry. This will mean less money for local government, particularly the city and county school districts which receive substantial funding from the tax. (The dollar amounts are less for county and city government, but this revenue loss must also be accounted for.)
Both city and county school boards are on record as supporting the freeport tax exemption. In effect they have signed on to a deal that guarantees them less revenue. (It seems like a strange position to take while simultaneously decrying the reduction in state funding for local school systems and also planning to open new schools.)
For the sake of discussion, we will assume school officials are doing so for the greater good a more robust local economy would generate. But are they willing to maintain the fiscal discipline necessary if the freeport exemption passes?
Property owners in Dalton or in Whitfield County should not be asked to make up the difference. The burden of taxation should not be shifted to property owners. The idea espoused by some “wise men” — mostly in private — that Whitfield Countians are “undertaxed” is bogus and an insult to people who are already paying the bills for local government.
However, the need for Whitfield County to take the necessary steps to diversify and reinvigorate its economy is very real. The freeport tax exemption is a step in the right direction because it puts this county on a more level playing field with other entities competing for economic investment. It makes the cost of doing business here less onerous, potentially freeing up more money for enlarged work forces and improved technology.
The carpet industry will survive the current economic malaise. But the industry that emerges from this tunnel is almost sure to be a leaner, more cost-conscious enterprise. Growing competition from manufacturers worldwide is also a crucial factor and one not likely to evaporate in coming years.
Whitfield Countians can sit back and play a waiting game — hoping that things will work out for the best.
Or, they can vote to move aggressively in making our future a better one.
Passing this freeport tax exemption is a step in the right direction. Protecting property owners at the same time need not conflict. It is the job of good government to balance these crucial goals.
Are our local governments up to the task?
Tuesday’s vote will give us an idea of what the electorate thinks.

The Daily Citizen