With just over a month to go until the election, Democratic gubernatorial candidate Roy Barnes has released his economic plan. Like President Obama’s campaign platform from the 2008 presidential election, Barnes’ plan has several elements that are carefully crafted to appeal to conservative and moderate voters.
Democrats have long realized that far more Americans consider themselves conservative or moderate than liberal. Even the year after President Obama’s historic victory, 40% of Americans considered themselves conservative, 35% moderate, and only 21% liberal. Therefore, Democrats realize that to appeal to enough voters to get elected, they have to speak like conservatives and moderates. Barack Obama did this successfully in 2008 and Roy Barnes is attempting to do so this year in the race to become Georgia’s next governor.
Barnes’ plan begins with a conservative-sounding call for a two year suspension of capital gains taxes for money invested in community banks, businesses, and property in Georgia and $300 million in tax credits for businesses who hire Georgia workers or raise their salaries. He also wants to create a Capital Access Partnership to encourage banks to lend to small businesses. Further, Barnes plans to invest in highway improvements and a high speed light-rail system.
Barnes’ proposals for tax breaks for business are good as far as they go. The problem is that they are the worst kind of tax breaks: temporary and targeted. These types of tax breaks are unlikely to attract businesses to our state because they will be phased out within a few years. Businesses are unlikely to hire new workers if they do not need them, just to get a temporary tax credit.
Likewise, helping small businesses to get loans is a good idea, but is unlikely to have a long-term economic impact. Many of the economic woes that our state faces are tied to Washington’s policies. With so much uncertainty in the form of expected tax increases and onerous new regulations, most businesses are likely to act to preserve their capital rather than risking it on new ventures.
Barnes is also off base on his plans for a light rail system. Light rail systems are extremely expensive and often run as inefficient government bureaucracies. Georgians have not embraced light rail in the past. MARTA, Atlanta’s rapid transit system, has recently been cutting service and raising fares in the face of declining ridership. It is unlikely that expanding passenger rail service to other cities would inspire many Georgians to take the train instead of the interstate or the University Parkway.
When Democrats speak of “investing,” they usually mean “government spending.” Barnes’ “investments” in light rail and research parks will have to come from somewhere, most likely from increased taxes. My attempts to contact the Barnes campaign to ask how he plans to pay for his proposals did not receive a response.
In a normal year, voters might be taken in by the talk of temporary tax cuts and investing in infrastructure. In a normal year, Barnes’ ads attacking Nathan Deal’s checkered past would be more effective. However, this year is different. This year Georgia voters have been burned by Democratic politicians who sounded as conservative as Roy Barnes until they took office, and are unlikely to fall for it again.