In early February this year, Georgia Republican lawmakers in the Senate passed two new bills: SB 476 and SB 477. These laws, now awaiting passage by the Georgia House of Representatives, are part of a package to reduce state income taxes, lowering what Georgians pay.

Under SB 476, the state income tax rate would be reduced from 5.19% to 4.99%, and the tax would be eliminated for individuals earning under $50,000 and families earning under $100,000. Under SB 477, the plan to phase out state income taxes would simply be extended in the future, with rates being set at 4.49% for 2027 and 3.99% for 2028. These two bills would significantly reduce the amount of money that is collected for the state from income taxes, thus putting a constraint on Georgia’s overall budget for each year.

According to the Georgia Budget and Policy Institute, state income taxes accounted for $19.5 billion in FY 2025, which made up 56% of Georgia’s overall general fund revenues of $34.8 billion. With state income taxes accounting for such a large portion of the state’s overall funds, this legislative package would have devastating impacts. According to another study by the Georgia Budget and Policy Institute, the package would cause a budget deficit exceeding $7.7 billion, the largest state budget deficit in modern history. If the state follows through with this package, it will be forced to either increase other taxes, such as sales taxes, or cut essential services like health care and public education, as three-quarters of Georgia’s state budget goes towards funding those.

On top of these already existing bills, Republican lawmakers across the state are talking about getting rid of the state income tax altogether. For example, current Lieutenant Governor Burt Jones, who is running for governor this year, has continuously shown his desire to completely eliminate the state income tax if elected. Doing this would only serve to expand the harms of SB 476 and 477, getting rid of crucial state funding and instead increasing regressive tax rates that disproportionately affect the lower class.

By cutting the state income tax, politicians would have to make up for the missing funds by increasing other taxes, such as the sales tax. The difference between the sales tax and the income tax is that one is regressive and the other is progressive. The sales tax stays at the same rate for everyone, while the income tax is based on income and rises in cost as income rises. For example, a wealthy individual and a poor individual would have to pay the same amount in taxes if they spent the same amount on a purchase, but the wealthy individual would have to pay a lot more for their income tax than the poor individual.

Progressive taxation is much better than regressive taxation because it redistributes wealth and helps to lower the wealth gap. By doing this, the U.S. government can improve equity and help close the wealth gap in the U.S. Instead, by cutting the state income tax, 71% of the total tax reductions would go to individuals in the top 20% in Georgia, according to the Institute on Taxation and Economic Policy.

While Republican lawmakers argue that cutting the state income tax benefits everybody because they no longer have to pay excessive taxes, this claim completely misses the fact that individuals will now have to make up for the deficit in increased sales taxes. This means that families will simply have to spend more on groceries, gas and any other purchases, simply making the cost of living more expensive. For example, the Institute on Taxation and Economic Policy finds that the bottom 80% of Georgians would see an increase of roughly $1,000 in annual taxes, thus showing the extreme cost of the new tax proposals for Georgia residents.

If the state cuts income taxes, they only have two options – both of which are terrible for Georgians. If the state doesn’t increase other regressive taxes like the sales tax to make up for the lost funds, then it would simply have to cut the vital services that millions of individuals rely on. For example, the same Georgia Budget and Policy Institute study found that the deficit caused by the SB 476 and 477 package is more than Georgia spends to insure more than two million residents through Medicaid, and more than Georgia spends on higher education to educate 500,000 students. If this package passes, or if worse, the state income tax is eventually cut as a whole, then funding for vital programs could disappear, threatening the livelihoods of millions of Georgians.