Last July, Dalton Mayor David Pennington became the first candidate to officially launch a campaign against Gov. Nathan Deal. The 61-year-old North Georgia insurance company founder has big dreams of downsizing state government, enacting ethics reforms, and growing the economy with entrepreneur-friendly policies. And yes, his plans include putting the kibosh on state income taxes once and for all.
This spring, Pennington will challenge Deal and Georgia Schools Superintendent John Barge in the GOP primary. The Carpet Capital's mayor, who next month will formally resign to focus on his campaign, faces tough odds against an entrenched incumbent governor with millions in his campaign coffers. He recently explained to CL why voters should consider casting a ballot in his favor.
Why should Atlanta residents of all political beliefs vote for you instead of your opponents?
First of all, the governor is the governor of the whole state, not just Atlanta. The metro Atlanta area is about half of the state, population-wise. Georgia's a very diverse state and Atlanta has been expected to carry too much of the weight for too long. What's happening is that in the Atlanta area, the taxes paid are distributed across Georgia. Atlanta doesn't get anywhere close to the percentage of taxes they pay.
For those of us not from Atlanta — I'm obviously from Dalton — we understand that Atlanta is 80 percent of the state's GDP in Georgia. Where Atlanta goes, we're going to go. Atlanta was really driving Georgia forward from the late '70s to the mid-'90s. We raced up the charts in median income and per capita income. Once metro Atlanta lost its way, it's taken Georgia with us at the same time. The solution has to be more balanced across Georgia for everybody pulling [his or her] own weight in order for this state to start moving again. We have dropped dramatically over the last 15 years not just compared to the nation, but the surrounding states. If we don't turn things around soon, the poverty is going to overwhelm everything else we're going to try and do.
If you become Georgia's governor, how would you improve the state in that manner?
We've got to understand where Georgia's real opportunities are over the next two decades. Unfortunately, most Georgians are only well-educated [enough] to get a good job in something like manufacturing that pays $13, $14, $15 per hour, plus health care benefits. That's outside the Atlanta area because you don't normally have heavy-to-medium manufacturing inside a metro area like that. That said, some of the outlying counties in metro Atlanta need the same thing, too.
Right now, we have to admit that Georgia is not competitive from a tax standpoint. We have the ninth-highest income tax in America. We have high sales tax. And we have the highest taxes on automobiles in America. Entrepreneurs in particular — and I'm a small businessperson, and so are my clients — we're paying our corporate taxes on our personal tax returns. State income taxes are so onerous for small business generation and growth. If we don't cut the income tax, we're not going to get this economy going again.
If you look at technology entrepreneurs — which Atlanta has a good share of those, obviously with Georgia Tech down there — most are looking at going public someday. They want to start their businesses with a very efficient capital structure. That's why they end up in Austin or Nashville if they're not going to Silicon Valley. There's no state income tax there! They don't pay state income tax on their earning profits, they don't pay state income tax on their capital investments, and they don't pay state income tax on their dividends or capital gains.
Deal has touted that Georgia is now the No. 1 place in the U.S. to do business. How do you respond to that his take on the economy?
It's just not true. It's just not true. He points to one magazine. That one magazine, everybody needs to understand, it's about crony capitalism. If you have cheap labor, get free land, and abate all out taxes, we're going to try and locate there. The South has perfected that kind of economic development over the past 60 years. And the South today is just as poor on a relative basis as we were when we started that. The reason is that money we're giving to out-of-state or out-of-country capitalists doesn't come from God. It comes from taxpayers. You do not create wealth in-state by bribing foreign capitalists to locate a plant here. You create wealth by entrepreneurs starting and creating their own business here. If you look at most of the business that drive the state of Georgia, they were founded here.
Another way to increase those kinds of jobs is through improving Georgia's public education system. You're running against Deal, who just proposed a $547 million K-12 education funding increase, and major education advocates in Barge and Carter. How would you improve education compared to them?
"Darwin at work."
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