Democrats also expressed concerns to the committee that removing the income tax would compel Georgia to reduce services or increase sales taxes, which would negatively impact those with low and middle incomes.
According to Sen. Nan Orrock, D-Atlanta, those who support tax cuts also want the ambulance to arrive in four minutes when a loved one is experiencing a medical emergency. You have to invest in that.
The first committee hearing on Tuesday highlighted a likely major theme in Georgia’s upcoming political campaigns. Jones has pledged to do away with the state income tax as part of his bid for governor.The committee’s chair, Sen. Blake Tillery, R-Vidalia, is a candidate for lieutenant governor. Senate Majority Leader Steve Gooch and Senator John Kennedy are among the other committee members.For lieutenant governor, two Republicans are also vying.
Georgia lawmakers have been lowering the corporate and individual income tax rates for years; according to a measure signed by Governor Brian Kempin in April, they will drop from 5.75% in 2022 to 5.19% this year. The large post-pandemic budget surpluses have helped to make those rate decreases possible.
However, it would be difficult to completely abolish the income tax. In the current fiscal year, the state anticipates collecting $15.7 billion in income taxes and an additional $3.3 billion in corporation taxes.
Thus, the income tax is by far the biggest source of funding for the state. With $9.4 billion, the sales tax comes in far behind.
Advocates claim that removing the tax will maintain Georgia’s ability to compete with other states. The Tax Foundation reports that eight states do not impose personal income taxes.
The head of Americans for Tax Reform, Grover Norquist, however, said the Senate committee on Tuesday that many states are lowering their tax rates in anticipation of eventually doing away with income taxes.
[email protected] is credited.
[email protected] is credited.
According to Norquist, despite lowering tax rates, those states have seen an increase in tax revenue because low tax rates draw in more workers and enterprises. According to him, several states have lowered rates by strictly controlling government expenditure and allocating a percentage of their excess tax money to long-term tax relief.
The wealthiest would disproportionately gain from the repeal of the income tax, according to critics. They claim that lower-income Georgians would have to pay a larger proportion of their income in higher sales taxes and levies, or the state would have to reduce essential services like food aid and education.
According to Orrock, Georgia is already unable to provide its citizens with a range of government services, and federal expenditure cuts are just going to make matters worse.
According to Orrock, it is our responsibility as a government to provide for the necessities of the people.
However, Tillery clarified on Tuesday that the committee’s task is to determine how to do away with the tax, not to argue over whether or not to do so.
Billions of dollars in tax incentives are a likely target. In addition to providing tax credits for the film industry and other sectors, Georgia also exempts customers from paying sales taxes on a wide range of personal services, including health care and haircuts.To make up for the loss of income tax revenue, the committee can suggest doing away with some of those tax incentives.
It is anticipated that the committee would submit its proposals in time for next year’s General Assembly to review them.
