We hear many supporters of government spending and critics of free markets say “only government action” can provide jobs, give folks money, and make everything all right. However, this faulty notion doesn’t work.
Make no mistake about it, members of the Georgia House have recognized that true economic recovery comes through the creation of new jobs by an expanding private sector, not by “work” created through government programs.
In 1981 President Ronald Reagan signed into law the immensely successful Economic Recovery Act. It was the largest tax cut in American history. As a result, the U.S. economy turned around in 1983 and boomed for many years. Shortly afterward he said, “We in government should learn to look at our country with the eyes of the entrepreneur, seeing possibilities where others see only problems.”
In the spirit of Reagan’s remarkable presidential leadership, Georgia House Republicans introduced legislation titled the “JOBS Act,” a series of tax credits, cuts and incentives to create, expand and attract new jobs for Georgians. We recognize that the greatest stimulus for a robust economy comes from an economic environment that encourages opportunity, productivity and innovation. It’s the hard-working people of Georgia — not big government — that are the key to our economic prosperity.
As firm believers in federalism, capitalism and the free market, the Georgia Republicans are proposing initiatives that are in stark contrast to the D.C. spending solution. The components of the JOBS Act of 2009, HB 481 and HB 482, include:
• A quarterly credit towards the Unemployment Insurance Tax for each eligible employee hired who is currently receiving unemployment benefits.
• A $2,400 income tax credit for each eligible employee hired. This credit will be available to those who hire an employee that has been unemployed and remains employed for at least 24 consecutive months at a rate above the average weekly rate of unemployment benefits as determined by the Department of Labor.
• A “New Business Tax Holiday.” This component would create a one-year “holiday” or moratorium on filing fees for new LLCs, limited partnerships and for-profit companies.
• The elimination of the sales tax deposit. This is a deposit charged to all Georgia businesses which have $5,000 or more in sales tax collections each month. This component will restore more than $180 million of working capital to Georgia businesses.
• The elimination of the state inventory tax on all Georgia businesses through a statewide referendum. Lifting this tax will lead to a great incentive for businesses to purchase products, stock inventory and locate distribution centers throughout Georgia.
The House overwhelmingly passed both bills with broad bipartisan support. HB 481 passed with a vote of 164-4, and HB 482 unanimously passes in a vote of 166-0. This legislation now moves to the state Senate for consideration, where I hope it will receive the same kind of support it got in the House.
House Republicans are very optimistic about Georgia’s future and confident that economic recovery will occur, but we have three options before us: we can wait with fear, prolong it with regulation, or speed it up through economic creativity. These measures, coupled with the entrepreneurial spirit and industrial grit of everyday Georgians, makes our decision clear.
State Rep. Tom Graves is a Republican from Ranger and is the primary author of HB 481 and HB 482. Rep. Graves is serving in his seventh year and is married with three children.