IN ATLANTA — The Republican-controlled General Assembly cut taxes by $1 billion during the election year of 2017. The cut will start on January 1, 2019.
As of now, the tax cut is being brought in. The state income tax rate for 2024 will be 5.49%, down from 5.75% now. The tax rate will keep going down every year until it reaches 4.99% in 2029.
But earlier this month, Gov. Brian Kemp said he was going to ask lawmakers to speed up the cuts by one year. The tax rate for 2024 would be 5.39 percent if lawmakers agree.
People who support this idea say that tax cuts for everyone are better at making jobs than the different tax credits and deductions that the General Assembly has passed over the years.
Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, a think tank that supports free-market approaches to public policy problems, said, “When you do it broadly, you’re not giving any favoritism.” “It keeps politics out of the policy.”
Wingfield said that targeted tax relief doesn’t help new businesses that policymakers can’t see coming.
“When you try to be more targeted, you help a business or industry that you already know about,” he explained. “When you give lots of people lower taxes, you encourage them to start the next business that will grow into a big one.”
Last year, Kemp and all 236 spots in the Georgia House and Senate were up for election. The tax cut was a huge hit with voters. On the last day of the 2022 parliamentary session, only two Democrats in the House voted against it.
But 13 Democrats in the 56-member state Senate voted “no” to the bill. A study from the Georgia Budget and Policy Institute, which leans to the left, showed that House Bill 1437 would raise taxes on about 10% of taxpayers and only help the top 20% of taxpayers with $620 million of the $1 billion tax cut.
“We are raising taxes on the working poor,” said Rep. Matthew Wilson of Brookhaven, who was a Democrat at the time.
Wilson didn’t vote for the bill the first time it came up for a vote in the House, but he did vote for it again on the last day of the session.
Republicans fought back against the claim that the bill would make Georgians with low incomes pay more in taxes.
Head of the House Ways and Means Committee and main supporter of the bill, R Bonaire’s Shaw Blackmon, said, “We haven’t been able to find anyone who pays more,” on the House floor the day the bill was passed. “Under this plan, no one pays anything or less.”
Kemp now wants the General Assembly to move the 5.39% state income tax rate that was supposed to go into effect from 2025 to 2024 so that the tax cut can happen faster.
Georgia can easily pay to speed up the tax cuts. In the past few years, the state has stored an extra $16 billion, with $11 billion in “undesignated funds.”
In early October, Kemp announced the plan. “Thanks to our conservative budgeting and strong state economy built on business-friendly policies, we are well-positioned to move the timeline up and put more money where it belongs—back into Georgians’ pockets,” he said.