The legislature is in session, and this session brings calls for killing taxes. The House is looking at killing the homestead property tax and the Senate is looking to kill the state income tax.
Florida killed the state income tax years ago and now is looking to eliminate property taxes. We should aspire to both eventually. This article focuses on the state income tax.
Senator Blake Tillery, Chairman of the Senate Appropriations Committee is leading the charge to kill the tax. He was appointed to Chair the Special Committee to Eliminate the Income Tax. The Committee released its report as the General Assembly convened.
Bottom Line
The report begins with a bold “literally boldfaced, headline sized print” summary statement:
“We recommend making the first $50,000 for individuals and $100,000 for joint filers completely tax free beginning in 2027. We also recommend reducing the state income tax rate for all other families and businesses. These proposals completely eliminate the state income tax on 2/3 of all working Georgians while drastically reducing the tax burden on everyone else.”
As the Chairman, Blake Tillery wrote an editorial for the Atlanta Journal Constitution to support the bold plan. Underscoring the aggressive plan, Tillery wrote that the committee’s charge was not to debate whether or not eliminating the income tax was a good idea. The charge was “to figure out how to do it responsibility.”
Plenty of politicians make bold campaign promises about cutting taxes. Chairman Tillery and the committee did not want to just talk. Their proposal is like the old Nike shoe slogan, “Just do it.”
What this means is that on day one of the new tax year, 2/3 of Georgia families would see an immediate elimination of the state income tax. That means zero state income tax deductions from their take home pay. It also means that the business they work for has less compliance burden in withholding and sending taxes to the state Department of Revenue.
How We “Pay for It”
When I mention eliminating the state income tax to some of my friends, the first question out of their mouths is often, “how are you going to pay for it?” That question itself belies an understanding that taxes come from a source that belongs to the government rather than to the individual. (That’s an article for another day)
Some liberal think tanks put out horror talking points stating that the sales tax would have to be increased to 12% to make up the difference. The committee faced those kinds of misrepresentations in its second meeting.
The committee unanimously and on a bi-partisan basis approved a motion that, “any elimination of the income tax wouldn’t accompany new state taxes on groceries, property, or gas.”
So how could the state adjust to the loss of state income taxes that are eliminated for 2/3 of Georgians? We do it by continuing the bold, conservative, fiscal policies that have led to strong economic growth and record surpluses each year.
We also do it by eliminating special interest tax breaks. In his editorial Chairman Tillery noted that the complexities of income taxes are an invitation to carve-outs and special treatment for special interest groups. Who ultimately pays for these carve-outs? You do.
The committee report puts it this way, “when special interests pay less, everyone else pays more.” Eliminating the income tax for everyone focuses on the average Georgia family as the special interest that is really important.
Prioritize and Execute – Just Do It
The committee has done its work. For my policy wonk friends, you can read the full report here: Georgia Senate Special Committee on the Elimination of Georgia’s Income Tax Final Report and Recommendations
The committee has acted responsibly by holding four meetings across the state and receiving input from numerous sources. I am impressed that the 22 page report concludes with a one sentence recommendation,
“Pass legislation this year to eliminate Georgia’s personal income tax on the first $50,000 a year for single filers and $100,000 per year for married couples filing jointly, effective January 1, 2027.”
The recommendation is positvely blunt with action, timeliness, and impact:
“Pass legislation.”
“This year.”
“To eliminate.”
Time for talking is past. Now it is the time to act. Just do it.
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