Georgia Senate Republicans are proposing eliminating the state’s 5.19 percent personal income tax rate by 2032, with possible changes starting next year.
The plan would eliminate Georgia’s state income tax on the first $50,000 of income for individual filers and $100,000 of income for married filers by the beginning of 2027. Should it pass, Georgia would become one of only nine states in the US to eliminate the tax.
“I think allowing citizens to keep the monies they earn as opposed to giving it to the government leaves them in a better position to help raise their families,” Republican State Senator and Chairman of the Special Committee Blake Tillery said. “Gas, groceries, power bills and child care expenses aren’t waiting. I’m hopeful we can eliminate the income tax on most Georgians immediately.”
According to the Georgia Senate Special Committee on the Elimination of Georgia’s Income Tax, such a move would fully eliminate state income tax for two-thirds of individual taxpayers in Georgia, as well as significantly reduce rates for all starting in 2027. The proposal aims to address affordability and keep more money in Georgian’s pockets, while also helping Georgia remain competitive with other states.
“Eliminating the state income tax would amount to a slightly larger than 5 percent increase in each family’s paycheck,” Tillery said. “Georgia families are telling us they need help now.”
In the Fiscal Year 2024, the Georgia Governor’s Budget Report showed that approximately $16 billion was collected under individual income taxes. Georgia collected total net taxes of almost $32.9 billion in that same time period. This means income tax accounted for almost 49% of the total net taxes.
Critics say Georgia already faces a shortfall of funding for vital services and cannot afford to lose money from the budget.
“I think the proposal would dramatically challenge us as a state to find the funding that we need for so many underfunded responsibilities that the state has towards its citizens,” Senator Nan Orrock said in an episode of GPB Lawmakers.
Orrock says the plan isn’t fully what it seems.
“The other side of that story, that cuts $16 billion out of our state budget and, long-term, I don’t see how we can afford that when we have high needs in every sector,” Orrock said. “Funding childcare, funding our prison system, every agency in the state is down; we aren’t fully staffing our agencies. We have our vulnerable children in our foster system right now, $80 million in the red.”
Many Georgians are eager to know how Georgia would be able to afford a zero-income tax policy.
“While tax savings might be had, there will have to be either a loss of some government services due to lower tax revenues,” Midtown Advanced Placement Economics teacher John Cowan said. “[Or] there would have to be an increase in other taxes in order to offset the losses from the lack of income tax revenue.”
While Florida raised its sales tax to cover the shortfall in revenue, Tillery says there would be no tax increases in Georgia. The Special Committee’s report suggests looking at other areas, such as re-examining corporate tax incentives and utilizing a current tax surplus of $2 billion.
“We give away in corporate giveaways, over $30 billion a year,” Tillery said on Lawmakers. “Take 10 percent of those, you can eliminate Georgia’s income tax on two-thirds of Georgians and give every Georgian a break for every year until eternity.”
The idea for eliminating personal income tax came from Georgia’s Lt. Gov., Burt Jones.
“Last year alone, nine states cut individual income taxes, and three others cut corporate income taxes,” Jones said in a statement on the Georgia Lt. Governor website in July. “In fact, among Southeast states, only South Carolina currently has a higher income tax rate than Georgia. If we wish to remain the number one state for business and keep our state competitive, we must expand on the progress made over the past four years to eliminate Georgia’s income tax.”
The Georgia General Assembly will eventually vote on the bill and pass it for it to be presented to Governor Brian Kemp for approval.
