WASHINGTON, D.C.-The founder and president of Americans for Tax Reform (ATR) praised David A Perdue Jr.‘s pledge to eliminate the state’s income tax in an exclusive interview with The Georgia Star.
“His coming out and saying: ‘Let’s phase down to zero,’ is helpful because we’re seeing this in other states,” said Grover Norquist, who started ATR in 1985 at the personal request of President Ronald W. Reagan.
“Where either the preferred candidate or the incumbent candidate says: ‘I’m going to take this out,’ or somebody else does,” he said.
“In fact, I did not know Perdue was introducing himself with that issue, but that is a huge advantage because he’s not relitigating 2020,” said the Massachusetts native. “He’s looking forward–phasing out the income tax is a forward-looking thing.”
“I would project that all red states will, over the next five years, have Republican governors who will say it is our goal to get to zero,” he said. “Doesn’t mean tomorrow, but our goal is to get to zero, which means every year there’s a budget.”
When Perdue announced his challenge to Gov. Brian P. Kemp this month for the GOP gubernatorial nomination in the May 24 primary, the former senator said income tax was part of his bold vision for the state: “Completely eliminate the state income tax; it’s time,” he said.
Perdue again made the pledge speaking Tuesday to a GOP gathering in Dalton.
“My whole vision for this state is very simple,” he said. “We’ve got to become more economically competitive.”
According to Perdue, Georgia is falling behind in the competition to other states without an income tax.
“We’re losing to places like Tennessee, Florida and Texas—guess what they have? They don’t have an income tax. Nine states in the country do not have a state income tax—and I’m going to work with this state legislature—and I think we can bring it.”
Norquist said Perdue is right about the competition to repeal state income taxes
Norquist said Perdue has to correct to join the movement in red states to eliminate their income taxes driven by the competition between the states.
“Now, we know that people move to the states with zero income tax and away from the high-income tax states,” he said.
“The number that is the most interesting is New York’s state budget and the Florida state budget,” he said. “There are more people in Florida than New York–more people live in Florida—the New York state budget is twice Florida’s. Twice. Florida’s roads are twice as good; their education is twice as good.”
The tax reformer said by his count; there are eight states without an income tax because New Hampshire does not tax straight wages, but the Granite State does tax interest and dividends.
“If you live in Massachusetts and you’re retired, and there’s a 5 percent tax on dividend interest, and you move to New Hampshire, you got nothing; you got nothing,” he said. “It’s not an improvement to be in New Hampshire over Massachusetts if you’re living off your life savings.”
Norquist said the Leave Free or Die State is now on track to join the income tax states. “New Hampshire passed the law that said in the next four years; they phase out the tax that they have now on dividend and interest income.”
States that do not tax income are Tennessee, Florida, Alaska, Nevada, Washington State, Wyoming, South Dakota and Texas, he said.
He said another state on track to eliminate its income tax is Louisiana, which has a Democratic governor, but Republican control of its legislature.
Norquist said he supports the model Louisiana is following, which has revenue triggers that rachet the tax rates down over time.
“Louisiana voted to phase out their income tax. Every time revenue comes in, to a certain extent, it keeps phasing down,” he said.
“New Hampshire’s a four-year phase-in. It’s 4 percent of their budget. They take it down to three, two to one, and zero, and in Louisiana, they say as revenue comes in,” he said.
With the phase-out approach, you avoid the sudden budget shocks, like the one that tripped up the repealed income tax in Kansas, which gave the political establishment the excuse to bring their income tax back.
Norquist: More states are in the middle of the process to repeal their income tax
“We have the Arkansas situation, the outgoing Republican, Hutchison, who wasn’t particularly good on taxes, at least he’s cut into income taxes on his way out the door down to zero,” he said. “Would’ve been nice if he started eight years ago, but he didn’t.”
“Watch for more Sanders. She’s running basically unopposed in the primary, and she’s out-front saying: ‘We’re going to zero. That’s our goal. We’re going to zero,’” he said.
“In Mississippi, they have passed it in the house, and the governor wants it, but they haven’t yet passed it in the Senate,” Norquist said. “In North Dakota, the house has passed it. In West Virginia, the Senate has passed it, and the governor supports it. These are the states where the governor and or one body of the legislature has said: ‘We’re going to zero.’”
In other states, like North Carolina, he said the movement has been on corporate and income taxes.
“In North Carolina, in the last seven years, they’ve taken the corporate rate from about 7.5 percent down to 5 percent,” he said. “They’ve hollowed it out, too. They get taxed at a higher rate, and they’ve taken corporate income tax to 2.5 percent. They just passed a law, and the governor, the Democratic governor, will sign this stuff.” Like Louisiana, The Tarheel State has a Democratic governor but a Republican-controlled legislature.
“In South Carolina, the governor announced in the State of the State address: ‘Our goal is to go to zero,’ because they’re sandwiched in between Florida, which is at zero and North Carolina, which is halfway to zero,” he said.
Other states are also in the midst of eliminating their income tax, creating momentum as states struggle to keep up with their neighbors, just like South Carolina’s Republican Gov. Henry D. McMaster is responding, Norquist said.
“Massachusetts is trying to go to graduated income tax, but that becomes more and more difficult as New Hampshire goes to zero,” he said. “This will be very, very helpful in getting competition among the states and discipline for Republicans.
Other states are in the process of repealing their income taxes, he said.
“Mississippi, North Dakota, and West Virginia, one house has passed it,” he said. “Arizona, both houses and the governor have taken it down to 2.5 percent.”
In Iowa, we’re doing well; you have a governor and a senator who both want to go to zero,” he said. “Wisconsin, in the spring, both houses have committed to phase down to zero.”
The competitive pressure among neighbors is such that in the next five years, every state in the southeast could have no state income tax, he said.
Norquist said while most of the action on eliminating the state income tax has been in states where Republicans control the legislature, it does not mean that blue states are immune.
Colorado is one of 14 states where Democrats control the legislature and have the governor, and there, Gov. Jared S. Polis is pushing to eliminate his state’s income tax, he said.
“Polis said the proper rate should be zero.”
– – –
Neil W. McCabe is the national political editor for The Star News Network. Send him news tips: [email protected] Follow him on Twitter: @neilwmccabe2.
Photo “David Perdue” by David Perdue. Background Photo “Georgia Capitol” by DXR. CC BY-SA 4.0.