At a time when leading Georgia lawmakers have the option to better fund core services that promote economic opportunity or enact broadly popular tax cuts for low- and middle-income Georgians, the General Assembly is instead advancing legislation (House Bill 1437) that would primarily cut taxes for the wealthy. We ask lawmakers to reject a flat tax.
Dear Chairman Hufstetler, Vice Chairman Albers, Chairman Blackmon, Vice Chairman Smith and Members of the Senate Finance and House Ways and Means Committees:
At a time when leading Georgia lawmakers have the option to better fund core services that promote economic opportunity or enact broadly popular tax cuts for low- and middle-income Georgians, the General Assembly is instead advancing legislation that would primarily cut taxes for the wealthy.
House Bill 1437 substantially rebalance the tax code in favor of the wealthiest due to the package’s proposed flat personal income tax rate. This comes at a cost in excess of $1 billion per year that threatens to jeopardize funding for public education and health care. Although certain provisions of the legislation—such as raising the standard exemption offered to all taxpayers and eliminating most itemized deductions for personal income taxes—would offer positive benefits to Georgia families if isolated, the package tilts significantly toward top earners because of the inclusion of a flat tax that increases the legislation’s cost by approximately $645 million annually. Due to policies historic and systemic that have contributed to lower levels of income and wealth for Black and Brown Georgians, this flat tax proposal would also worsen racial inequities and expand the racial wealth gap.
The package also risks the state’s ability to fund core services and programs for Georgians. The bill would also cost over $1 billion a year—or more than Georgia spends on the entire Department of Human of Services, the state’s ninth-largest agency, annually. This legislation, as written, could jeopardize our ability to fund our public education system, our health care system and so much more.
Maintaining a graduated income tax, where tax rates increase as income levels do, is a key component to preserving fairness in Georgia’s tax code, rather than setting the state up to ask more from low- and middle-income Georgians so that top earners can pay less. Rather than shifting to a flat tax, lawmakers can also provide tax relief that better targets low- and middle-income Georgia families by modernizing the state’s graduated income tax to better reflect income distributions.
Although there are some aspects of HB 1437 that would improve Georgia’s tax code, the bill is made unnecessarily costly and regressively harmful by the inclusion of a flat tax. Lawmakers must reject this measure as it was passed by the House of Representatives and focus on enacting tax measures that improve the tax code for low- and middle-income Georgians. One of the best ways to make the tax code more fair is to enact an Earned Income Tax Credit (or Georgia Work Credit) that would put money in the pockets of Georgia’s low- and middle-income families, rather than focusing the state’s limited resources on further enriching top income earners. By also prioritizing common-sense measures to raise revenue alongside these changes, tax reform can be accomplished without risking the state’s ability to meet its obligations.
9to5, National Association of Working Women Georgia Chapter
Coalition for the People’s Agenda
Community Foundation for Greater Atlanta
Faith in Public Life
Georgia Budget & Policy Institute
Georgians for a Healthy Future
Intercultural Development Research Association
The Latin American Association
United Campus Workers of Georgia
YWCA of Greater Atlanta