While federal health care reform has dominated recent headlines and airwaves across the country, another less publicized, but equally important, issue is also unfolding in Washington. Currently, the U.S. House Ways and Means Committee is holding hearings on our country’s outdated tax code. Significant and meaningful tax reform is much needed and could spur economic development not only in Georgia, but throughout our country. However, one of the changes being discussed, the removal of interest deductibility on business debt, would be detrimental to Georgia’s economy, as well as our nation’s economy as a whole.
In fact, research conducted by Ernst & Young shows that limiting interest deductibility by even 25 percent in order to finance a lower corporate tax rate would curtail economic activity in Georgia by almost $1 billion. Businesses of all sizes and sectors use debt financing to grow. Major industries in Georgia, such as manufacturing and construction, which together employ hundreds of thousands of Georgians, would be negatively impacted in the long term by limiting or eliminating interest deductibility.
I have dedicated my public service to caring for our most vulnerable citizens, and I am cautious of any tax reform package that could hinder our economic growth. Getting our federal tax code right is not just about business. A growing and prosperous economy gives us the resources needed to care for important areas like mental health and improved foster care, and bad policies that shrink our economy would hit these areas the hardest. As a state representative, I am in favor of tax reform and reducing the tax burden on all our state’s citizens and businesses, but we must be careful about how we implement reform so that we do not cause harm to hard-working Georgians and our state’s economic growth.
Representative Katie Dempsey represents the citizens of District 13, which includes portions of Floyd County. She was elected into the House of Representatives in 2006, and currently serves as the Chairman of the House Appropriations Subcommittee on Human Resources. She also serves on the Economic Development & Tourism, Energy, Utilities, & Telecommunications, Health & Human Services, Higher Education, Rules, and Transportation committees.