Trammell: Tax plan bad for Ga.
One item targeted in the tax reform bill is a deduction for state and local taxes, which is claimed by a third of all Georgia filers.
ATLANTA — A popular deduction targeted in the GOP’s overhaul of the tax code is used by more than a quarter of all filers in a majority of states, including many led by Republicans where some residents eventually could see their federal tax bills rise.
The exact effect in every state isn’t known, in part because of differences in the Senate and House versions of the bill. But the change to the deduction for state and local taxes could alter the bottom lines for millions of taxpayers who itemize.
Residents in high-tax, Democratic-led states appear to be the hardest hit. But some filers also could be left paying more in traditional Republican states, such as Georgia and Utah where about a third of taxpayers claim the deduction.
“It’s a bad deal for middle class families and for most Georgians,” said Georgia state Rep. Bob Trammell, leader of the House Democrats.
He said Republicans are eliminating the state and local deduction to help pay for tax cuts for businesses and the wealthy.
How many winners and losers are in each state depends in large part on another aspect of the Republican tax overhaul that would nearly double the standard deduction — to about $12,000 for individuals and about $24,000 for married couples.
Republicans say that provision would be a net benefit for most tax filers.
The Tax Policy Center, run by the Urban Institute and Brookings Institution, has estimated that the number of people itemizing deductions would drop by threequarters. Some of those taxpayers could get a larger deduction under the Republican plan, even though they no longer could claim a break for state and local taxes.
“Based on what I have seen, it might actually help some Georgians” to replace the state-and-local tax break with a higher standard deduction, said Georgia state Rep. Terry England, the Republican chairman of the House Appropriations Committee.
Yet estimates by the Tax Policy Center and a nonpartisan congressional analysis say some taxpayers eventually will end up owing more in federal taxes under the GOP plans.
The left-leaning Institute on Taxation and Economic Policy said changes to the state and local tax deduction under the House bill would contribute to one of every five taxpayers in the hardest hit states getting a higher tax bill. While most of those states are led by Democrats, Republicanled Georgia and Utah, and the swing state of Virginia were among them.
Democratic lawmakers said that any initial tax relief felt by the middle class or working-class families will eventually disappear. In Georgia, for example, an estimated 9 percent of filers would pay higher taxes in 2018, rising to 22 percent by 2027, according to an analysis by the Institute on Taxation and Economic Policy. Richard Marable, “The Monopoly Man,” hands a free ice cream coupon for the Armuchee McDonald’s to Talley Pierce, who is holding his 8-month-old son Landyn Avery Pierce, following the Candy Cane Hunt on the Town Green Saturday afternoon. Evan Roden spreads out candy before the Rome-Floyd Parks and Recreation Candy Cane Hunt. Kids crowd the Town Green looking for candy. Photos by Spencer Lahr, Rome News-Tribune