For people with itemized deductions

exceeding $7,600, there's no problem, as itemized deductions will be used

on both the federal and the state returns. But imagine your itemized deductions

come to $7,200. If you follow the obvious rules as you find them, you'll

deduct $7,600 on your federal return and $3,000 on your state return.

If you decide (as you should)

to outsmart the state, you will itemize $7,200 on your federal tax return

and pay the extra federal tax (possibly $60 here, at 15 percent), and

then you'll itemize the same $7,200 on your state return and save state

income tax on $4,200 (possibly $252, at 6 percent). You might be unhappy

that the state of Georgia forced you to pay an extra $60 in federal tax,

but you'd still have a net gain of $192.

It's obvious to me that the

state should take a serious look at its standard deduction rule. In the

west part of Fayette County we have a state senator who I understand is

an accountant, and before him we had a life insurance agent with the skills

to handle the needs of high-net-worth individuals, yet not a peep was

ever heard from either about fixing any part of our state income tax law

to make it fairer.

For the state to make some

citizens pay more federal tax than they should is, in my opinion, fairly

stupid, but it strikes me as dishonest for the state to make us, its citizens,

pay sales tax on the rebate part of our purchases, especially on big items

like cars.

Just go to a new car dealer,

and see what I mean. The manufacturer gives you a so-called rebate (some

as high as $2,500, with $2,002 currently on many vehicles), which is deducted

immediately from the price. Even though you're paying, say, $18,000 for

the car, the dealer charges sales tax on $20,000 and insists he has to

under state rules. For a resident of Fayette County, that's like throwing

$100 away, though a Coweta or Fulton County resident is throwing $140

away.

Since a rebate, especially

an instant rebate applied at the time of purchase, reduces the sales price,

it's extortion for the state to impose sales tax on the phantom part of

the price. It happens every day with grocery coupons, and all these pennies

add up. If a rebate is supposed to be mailed by the manufacturer later

on, the state could possibly argue it's not sure you'll ever get it, but

there's no argument about an in-store rebate. Our state legislators haven't

been fighting for us on that.

I have some qualms, too, about

the imposition of sales tax on shipping charges, since shipping is a service,

and on some rental fees where the landlord has already paid a sales tax

when buying whatever it is that's being rented.

When SPLOST was being proposed

to our citizens, I observed that the state keeps 1 percent of what it

collects in local sales tax as a service fee. What is interesting here

is that whenever an extra 1 percent is added to an existing local sales

tax, the state's service fee doubles or even triples in amount even though

the state's work is absolutely the same. That's all at the expense of

the local people, who receive that much less from the state.

Even though rough justice characterizes

our tax collection system, there comes a point where the roughness mutates

into outright unfairness, or even stupidity (as when one must pay more

federal tax than the feds would settle for, just to avoid paying too much

state income tax). Let's pass on the word to those who would represent

us in the Georgia General Assembly, especially those who like to harrumph

about taxes.

And if you can save yourself

a little state income tax from what you learned here today, congratulations!

Those who think their "fair share" is higher than their lowest

computed tax should know that the feds, the state, and the local school

board will accept voluntary contributions; the little extra so good-naturedly

given to the government will even be deductible as an itemized deduction.

As Yakov Smirnoff would say, what a country!

Claude Y. Paquin

Fayetteville

[email protected]

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