Georgia state lawmakers are moving forward with a proposal to further cut the state income tax rate, and shift its structure from a graduated income tax ranging from 2% to 5.75% depending on income to a flat income tax rate: 5.375% for all incomes.
Danny Kanso, an analyst with the Georgia Budget and Policy Institute (GBPI) agreed the flat tax “would almost exclusively benefit high-income earners at the expense of teachers and low- to middle-income Georgia families across our state.”
“While Georgians at the very top of the economic ladder would benefit from over $4,200 in average tax savings, most Georgians would either experience a tax increase or a share of savings so limited that they would be unlikely to observe an increase in their regular take-home pay,” Kanso said.
The GBPI estimates 52% of Georgians would see a tax increase after the change. […]
Kanso countered that credit would “do little more than partially offset” the tax increase GBPI predicts.
A priority of Gov. Brian Kemp, tripling the state’s adoption tax credit, is also included in the legislation. […]
State Economist Jeffrey Dorfman addressed the idea of cutting the state income tax rate again in January.
He said at the time the state needs to attract new companies and jobs in order to grow revenues.
“I don’t believe the way you get companies to move to Georgia is by lowering the income tax rate. The reality is once we add our federal and state income tax rates together, a quarter percent one way or the other on the state income tax rate just doesn’t move the bar,” he said.
“Thinking about smart ways to attract businesses, like keeping our rating as the number one state to do business, removing needless regulations, speeding up the permitting process, these are the things we need to do.”
