Brace Yourself For the Slowing Georgia Economy

images_man_braking_car“Individual income tax collections for the month increased by 11.5 percent, while gross sales tax collections deposited during November rose a minuscule 0.2 percent. Net sales tax revenue fell by 1.3 percent.

Corporate tax revenues in November increased by $5.1 million.”

http://www.bizjournals.com/atlanta/blog/capitol_vision/2015/12/georgia-tax-receipts-up-7-5-percent.html

There’s what you need to know in a nutshell.

Gross sales tax collections rose only 0.2% in November.  Net Sales Tax Revenue fell by 1.3%.  That says recession.

In an economy that is based on consumption, consumption must outgrow everything else.

The individual tax collections will soon follow suit as well as corporate tax revenues.

If people are not spending more money, companies do not make as much profit.  Companies that do not make as much profit do not need as many employees.  Fewer employees means lower income tax collections.

The state of Georgia did pass a Billion dollar transportation tax earlier this year.  We have begun to see that impact.  Taking a billion dollars out of gross receipts and sending it to the state, rather than to the bottom line of companies and into your banking accounts as savings has a cost.

We will see that cost in full glory shortly.  The tax, however, will not be reversed.

What we will see is everything else blamed, from warm weather to cold weather, to the strong dollar to …..

The truth, however, is much simpler.  Governments that tax too much destroy their own economic engines.

 

Johns Creek: Foolin’ Ourselves

The residents of Johns Creek, Georgia have lots of things going for it.  Excellent housing, many of the best schools in the state for kids, and income levels that surpass nearly every other community.

Those positive attributes, however, have led to a flow of tax dollars into the City’s Coffers that is now doing more harm than good.

Since 2006, the year the city formed, the City has amassed $54,348,545 at the end of the fiscal year 2014, according to the City’s Certified Audited Financial Report.  That represents an increase of almost $7,000,000 per year of revenue over expenses.  With a population of around 80,000, that works out to more than $670 per every man, woman and child.

That’s an astonishing amount of money to be held per capita, and it’s growing.  Last evening, the City Council, under the lead of Mayor Mike Bodker voted to maintain the City’s millage rate at it’s current level, despite the property valuations rising sharply over the last year.  More money will be flowing into the City’s coffers again in 2016 coming directly out of the pockets of the residents.  And while it may not seem like a big deal to many outside of Johns Creek(after all, they can afford it), it is creating problems that will soon become more and more apparent as time passes.

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