Monday, March 07, 2016

Georgia Republicans trying to cut state income taxes for top 1%

They say there is not enough money to protect children from being tortured to death by their parents; there is not enough money to expand Medicaid; there is not enough money to fix the potholes in the roads. But there is enough money to give a tax break to the very rich.

And this would make Georgia's already very regressive state and local taxes even more regressive.

March 3, 2016 10:29 AM
By Dylan Grundman


Georgia lawmakers, spurred on by the fact that all 236 of them are facing re-election this year, are considering drastic changes to their state's personal income tax. One proposal could entirely repeal the income tax.

One of the bills under consideration (HB 238) contains some positive provisions, such as limiting deductions that are primarily used by high-income households. But the bill would also flatten and reduce the state's income tax to a single rate of 5.4 percent (the top rate is currently 6 percent). Lawmakers are selling this proposal as a tax cut for most Georgia families. But an Institute on Taxation and Economic Policy analysis of the plan reveals that most working families would receive minimal benefit. More than half of the resulting tax cuts would flow to just the top 20 percent (PDF) of Georgia residents, and even then the benefits are weighted most heavily for the very richest. Families earning less than $100,000 would receive an average tax cut of $100 while the top 1 percent of families would get an average cut of $2,850. Meanwhile, the overwhelming majority of Georgia families would lose because the state's ability to fund crucial services would be seriously harmed. Nonetheless, the bill has passed the House and advanced to the Senate Rules Committee and appears to be on a fast track to passage.


Meanwhile, the state Senate has approved a measure (SR 756) that would amend Georgia's constitution to force further income tax cuts when certain 'triggers' are met.


Even under that generous reading, however, revenues would fall by some $350 million and roughly 70 percent of the benefit would go to the top 20 percent of Georgia households.

Georgia’s pending tax cuts are part of a broader, disturbing trend at the state level that seeks to tilt already unfair state tax codes even more heavily in favor of the wealthy.


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