Influential think tanks at odds over $1 billion state tax cut
Two think tanks that have long been fixtures under the Gold Dome have reached dramatically different conclusions about a proposed $1 billion state tax cut before the General Assembly.
The Georgia Public Policy Foundation (GPPF) says the legislation, which the state House of Representatives passed March 9, would create tens of thousands of jobs and put more money in the wallets of a broad range of taxpayers.
The Georgia Budget and Policy Institute (GBPI) says most of the benefits would go to upper-income Georgians, while slashing tax revenues would threaten state funding of public education and health care.
The bill would set Georgia’s income tax rate at a flat 5.25%, down from 5.75%. It would eliminate the current standard deduction and replace it with a larger “standard exemption” of $12,000 for single filers and $24,000 for married couples filing jointly.
House Bill 1437 also would eliminate most other deductions, with the exception of charitable contributions. The legislation would take effect Jan. 1, 2024.
The bill is the next step in reducing state income taxes the Republican-controlled legislature began after Congress passed federal tax reform in 2017. The General Assembly lowered Georgia’s income tax rate from 6% to 5.75% in 2018.
Lawmakers haven’t followed through with additional tax relief until now because of fears the state’s finances would plummet during the coronavirus pandemic. Instead, tax revenues have been on the rise, leading to this year’s push for another tax cut.
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