Lawmakers in Madison, Georgia are considering hiking an “occupation tax” paid by the city’s business owners.
In June, the Madison City Council held a public hearing exploring the tax-hike proposal. At the meeting, government officials said the city government currently collects about $37,000 annually in occupation-tax revenue. Business owners’ occupation-tax obligations are calculated by the government and are based on the number of individuals employed at the business.
Madison lawmakers are considering hiking the occupation tax’s base rate, and increasing tax rates charged for hiring additional employees.
‘Taxpayers Should Be Outraged’
Nan Swift, director of federal affairs for the National Taxpayers Union, says local taxpayers should be upset about the proposed tax hike.
“Taxpayers should be outraged,” Swift said. “If I were a taxpayer in Madison, Georgia, I would be concerned that my city leaders are making it harder for businesses to want to move there and have economic growth.”
Swift says the proposal will also lighten consumers’ pocketbooks.
“For a business that sells things, those are costs that would be passed on to customers,” Swift said. “In that way, it would dissuade people from coming to town. It definitely hurts business growth. Certainly, no small business would be eager to expand or relocate there, and if people face higher prices, that’s going to affect their buying decisions as well.”
Need for Revenue Questioned
Swift says local lawmakers should consider reducing spending, instead of hiking taxes.
“Most places do not have a revenue problem; they have a spending problem,” Swift said. “That’s the first place to look. If Madison, Georgia wants to attract business, this tax is not the way to do it. We see more economic growth when taxes are lowered.”
Fire the Tax Collector?
Kelly McCutchen, president of the Georgia Public Policy Foundation, says instead of raising taxes, city lawmakers should consider cutting government payrolls.
“They might want to look at their collection costs,” McCutchen said. “It seems like there was about $40,000 they were needing, and if they have one person dedicated to managing collections and recordings for that tax, it might be easier just to eliminate it and use the savings. That would be a recurring savings.”
McCutchen says lawmakers should consider cutting regulations, too.
“I’m always concerned about small businesses and all of the bureaucratic hoops they’re required to jump through,” McCutchen said.
