Kemp, Georgia lawmakers unveil plan to speed up income tax cut

Republican state leaders announced Monday that they plan to fast track a planned reduction of the state’s income tax rate.

Lawmakers passed a plan last year to gradually phase in reductions to the state’s income tax rate over time if certain economic markers are met. But with the state sitting on a massive surplus, Gov. Brian Kemp and legislative leaders say they want to jump ahead in the timeline for reductions.

Instead of dropping the rate to 5.49% as planned this coming year, GOP leaders will push to lower it to 5.39%. The proposal will need to go through the legislative process.

Currently, the state’s top rate is at 5.75%. The plan passed last year called for flattening and incrementally reducing the rate to 4.99% by 2029, but the planned cuts would be delayed if revenues are not on track to be at least 3% higher than the previous year.

Accelerating the timeline means foregoing more state revenue more quickly. The state’s income tax is a major source of revenue for the budget, generating about half of all the money collected to fund schools, law enforcement, health care for the poor and disabled, and a host of other services.

Monday’s press conference was billed as a “major announcement.” But some long-time critics of the plan said the proposed change will not make a significant difference for the average Georgia household.

For people earning between $42,000 and $73,000 a year, the proposal amounts to about another $27 in savings a year, said Danny Kanso, director of legislative strategy and senior fiscal analyst at the Georgia Budget and Policy Institute.

“That’s just a tiny drop in the bucket,” Kanso said Monday. “If we want to make a meaningful difference in the lives of most Georgia families, cutting the top income tax rate is just not the way to do it.”

Read the full article by the Georgia Recorder

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