INSIDE TODAY

‘Reform’ would be second reduction in rate since 2018.

■ House Speaker David Ralston has unveiled a new plan to cut the state income tax rate to 5.375%, the second rate reduction since 2018. Ralston said the measure would save taxpayers about $250 million a year. The first cut, in 2018, saved Georgians more than $500 million. Read more on

House Speaker David Ralston on Monday announced a new proposal to cut the state income tax rate to 5.375%, the second rate reduction since 2018.

Ralston, calling it a “comprehensive income tax reform” plan, said the measure would save taxpayers about $250 million a year.

“It would keep the promise we made to Georgians in 2018 and more,” Ralston said. “Every Georgian should pay less in state income tax once this becomes law.”

Analysts have questioned that assertion on similar legislation, saying some Georgians will almost certainly pay higher taxes. If approved, the measure would go into effect in January, meaning the lower rates won’t make an impact on state revenue until after the upcoming budget year.

House leaders have been pushing for a second cut to the state income tax rate, and the proposal passed the Ways and Means Committee on Monday.

Lawmakers voted in 2018 to reduce the top state income tax rate from 6% to 5.75% in response to federal tax changes that, officials thought, would force many Georgians to pay higher state taxes.

The first cut, in 2018, saved Georgians more than $500 million. The 2018 legislation set up a second vote, in 2020, to lower the rate again to 5.5%.

Ralston said his proposal would eliminate the current graduated tax rate system and set a flat rate for individuals of 5.375%.

“It will make Georgia’s tax system fairer, flatter and allow Georgians to keep more of their money,” the speaker said.

A vast majority of the savings are expected to go to upper-income Georgians, according to an analysis by the Georgia Budget and Policy Institute, which opposes a second income tax cut.

The plan, tacked onto uncontroversial legislation — House Bill 949 — would include a credit for some low- and middle-income families and a tripling of the tax break for those who adopt children.

Rep. Debbie Buckner, D-Junction City, a member of the House Ways and Means Committee, said, “I just can’t help but wonder if doing so many things and total reform at this time is not a risky thing to do.”

The cost would be offset, somewhat, by other changes in tax law. The plan includes a provision that would eliminate the “double deduction” of state income taxes some Georgians can take on their tax returns.

If approved, it could raise taxes $130 million to $220 million on Georgians who itemize their deductions.

House Ways and Means Chairman Brett Harrell, R-Snellville, said it would prevent Georgians from deducting the state income taxes they pay on both their federal and state income tax returns.

Under the measure, taxpayers could only deduct their state income taxes on their federal returns.

Now, they can take the deduction on federal forms and use that reduced taxable income when they do their state taxes. Georgia is one of few states that allow that.

At least for some taxpayers, the loss of that double deduction, in theory, would be more than made up for by the lower top rate Ralston wants.

An Atlanta Journal-Constitution poll in January found that about 50% of voters favor keeping the current state income tax rate, against roughly 38% who want to see it cut again. An additional 9% said taxes should be increased. The remainder either said they did not know or refused to respond.

But this is an election year, and Ralston and Republican House leaders are fighting to maintain control of the chamber after Democrats picked up seats in 2018. Ralston has made tax cuts part of that partisan debate. “Republicans cut taxes,” he said Monday, repeating a line he has used in recent weeks.

Some groups that rely on state funding said the General Assembly should be careful about reducing taxes, considering that budget cuts Gov. Brian Kemp ordered last fall were blamed, in part, on a slowdown in collections after the 2018 tax cut.

“We request that lawmakers proceed cautiously when considering additional tax cuts during a time when the state has so many public service needs,” said Craig Harper, the executive director of the Professional Association of Georgia Educators, the state’s largest teacher group.

Danny Kanso, a tax analyst for the Budget and Policy Institute, said, “Amid increasing economic uncertainty and slowing revenue collections, abandoning the structure of Georgia’s largest and most dependable source of revenue in favor of a flat tax would almost exclusively benefit high-income earners at the expense of teachers and low- to middle-income Georgia families across our state.”

“Simply put,” Kanso said, “Georgians cannot afford to risk the stability of our revenue system in order to fund tax cuts for high-income earners at the expense of average families.”

‘It will make Georgia’s tax system fairer, flatter and allow Georgians to keep more of their money.’ David Ralston

Speaker of the House

BEN@BENGRAY.COM CONTRIBUTED BY House Speaker David Ralston said his proposal would eliminate the current graduated tax rate system and set a flat rate for individuals of 5.375%. “It will make Georgia’s tax system fairer, flatter and allow Georgians to keep more of their money,” the speaker said.