PRESS RELEASE: On Tax Day, Georgia Should Commit to Reimagining the Tax Code to Promote Equity and Shared Prosperity
ATLANTA, GEORGIA — This Tax Day, Georgians are living under a state tax system designed to favor the wealthy and special-interest corporations, who pay a smaller share of their income in state and local taxes than poor and middle-class Georgians, even as working families face critical needs in the areas of health care access and public education.
In 2022, the state legislature passed House Bill 1437, which will shift Georgia from its graduated income tax to a flat tax of 5.49 percent in January of 2024. When fully implemented, the package is estimated to total over $2 billion in lost revenue annually, equivalent to over 14 percent of Georgia’s current personal income digest. Under the flat tax, most tax savings would be directed to Georgia’s top earners, while those with the lowest incomes would the smallest share of net savings.
During the 2023 Legislative Session, lawmakers made some improvements to modify the tax changes approved under HB 1437. Senate Bill 56 reverses a regressive policy change that would have eliminated the state’s standard deduction in favor of a larger personal exemption. Without this policy change, higher-income taxpayers claiming itemized deductions would have received a double benefit. Under SB 56, taxpayers must choose between either claiming a flat standard deduction of $12,000 for single filers or $24,000 for married couples filing jointly or claiming individual itemized deductions.
“An equitable tax system is essential for building an economy that works for everyone, not just a select few,” said GBPI Senior Fiscal Analyst Danny Kanso. “If we reform our tax code to ensure that corporations and those at the top of the economic ladder pay their fair share of taxes, Georgia can deliver good schools, safe communities, quality health care to those who need it most, and improve the quality of life for all of us. We have the power to make that vision a reality.”
Lopsided tax systems are a policy choice that worsens inequality and makes it harder to solve the problems Georgia’s families face. Lawmakers can un-rig the tax code to restore fairness and raise the public money needed to ensure everyone, regardless of race or place, has the opportunities they need to thrive. Beginning next month, members of the House and Senate are set to undertake a joint review of our state’s tax code—also approved under last year’s HB 1437—that should empower the General Assembly to take an honest look at how resources are being redistributed to special-interest corporations through Georgia’s tax code, and to chart a path that eliminates wasteful tax credits and exemptions to build a fairer system that prioritizes working families.
Instead of shifting the tax code further to enrich the wealthy at the expense of Georgia’s most vulnerable, the General Assembly should require those at the top to pay their fair share and roll back corporate subsidies and tax breaks that unfairly redirect resources away from the vast majority of Georgians.