By Gretchen Keiser

A group working to exempt food and medicine from Georgia sales tax has received $25,000 in funds from the national Campaign for Human Development.

The money has gone to the Georgia Citizens Coalition on Hunger, a non-profit group based in Atlanta and concerned with the plight of poor families and with legislation and budget decisions that adversely affect the poor.

That focus has led to the sales tax exemption project, which addresses the particular hardship endured by the poor who are spending a very high percentage of income on necessities and, as a result, are losing a critical part of their income to sales taxes on needed items like food and medicine.

Georgia is believed to be the only state in the nation that does not make some provision to provide low-income people with sales tax relief, said Sandra Robertson, executive director of the Coalition. Some states automatically exempt food or all grocery store items from sales tax, she said. Others provide a section on the state income tax return to take a tax credit for money already expended in sales tax.

While a sales tax on the surface may seem to be a fair tax that hits everybody at the same rate, that is not the way it affects different income groups, she pointed out. The sales tax is considered a regressive tax because it makes no distinction between those who are middle- and upper-income and those who are low-income. Whichever group you fall into, if you live in Atlanta five cents of every food dollar is spent on sales tax.

Ms. Robertson estimated that low-income families spend 40-50 percent of their income and up on food. As a family’s income increases and they move into middle- and upper-income groups the proportion of their income spent on food decreases.

This equation squeezes the poor without exception, she noted; even those who use the federal Food Stamp program to buy food pay a sales tax on food. At a time of increasing hunger problems in the state, “placing a tax on food only contributes to the problem, it doesn’t diminish it,” she said.

The funding from the Campaign for Human Development will provide a portion of the support needed to launch an educational and legislative lobbying campaign statewide on this issue. A wide variety of organizations in Georgia, including the League of Women Voters, labor organizations and educational organizations and low-income advocacy groups, have shown interest in supporting the exemption as part of a broad effort to reform the state structure.

Ms. Robertson emphasized that the Coalition and the other groups who are coalescing around the issue of tax reform are not simply proposing that the state lose the money it now receives in sales tax on food and medicine.

They also plan to make specific proposals as to ways the state can recoup the lost funds through other areas of tax reform. Specifically, the groups is looking into the increased revenue that could be provided if Georgia income tax brackets were revised to tax graduated incomes over $10,000, rather than applying a flat six percent rate to all incomes over $10,000 as is done at present. Another proposal being examined is the possibility of instituting a severance tax on the state’s irreplaceable natural resources, such as kaolin, to compensate the state financially for the loss of valuable minerals permanently lost through mining.

The amount of money that is expected to be lost in sales tax annually through the exemption of food and medicine is $200 million and so the group will continue to search for ways to generate at least that amount through other areas of tax reform, Ms. Robertson said.

“We support a strong tax base” for the state, she said. “We don’t want to see any services diminished,” but would like to see the state be able to expand the services it provides.

Funding for the Campaign for Human Development comes through a once-a-year national collection, which is disbursed through local offices and through the national office in Washington, D.C. It is intended to support social justice efforts that not only affect the poor, but also involve them in the process of change.