Two high-profile Republicans running for higher office in Georgia have a pitch for voters: zero state income taxes. They have promised that the change wouldn’t cause much pain if the state ends $3 billion in corporate tax breaks.
The policy is not a new idea for Georgia — but it’s never gone very far.
One of the major reasons is that the math never adds up to many people. Another is that critics question the fairness of the policy.
Neither of those critiques has slowed state Sen. Blake Tillery, R-Vidalia, who is running for lieutenant governor and using the issue as a cornerstone of his race.
Over the summer he chaired a legislative study committee that collected testimony in favor of abolishing the state income tax. Lt. Gov. Burt Jones, a Jackson Republican looking to move to the governor’s mansion, has endorsed the proposal.
Income taxes in Georgia — currently 5.19% — pay for about 44% of state services. Those income taxes will total about $16.1 billion in the state fiscal year beginning July 1, 2026. Georgia’s biggest outlays go to public education, health care and prisons. These costs rise every year with population.
Tillery’s committee recommended that the legislators scour the 210-page list of special tax treatments and cut $3 billion in what it called “corporate welfare” from the list to help offset revenue lost by ending state income tax.
Some of these carveouts, however, benefit regular Georgians, as auditors note in their Tax Expenditure Report. For example, groceries are not taxed at the cash register in Georgia, something that saves all residents money but costs the state approximately $1.2 billion in lost potential revenue.
Tillery’s campaign ads that center his support for eliminating the state income tax are careful to point out that he does not propose sales taxes on groceries. He promises that he won’t raise any sales taxes and won’t cut out any special treatment for retirees or members of the military.
Tillery told The Current GA that he proposes using Georgia’s budget surplus and cash to start reducing income taxes this year in a process that would eliminate the burden over several years. Much of the proposal depends on the assumption that the state’s economy would grow and that its revenues would grow because residents would have more cash, more and more spending power; and that there are Georgians who don’t work but would change their minds and start doing so if there were no income tax. Residents from surrounding states would also be attracted to move here for tax reasons, he believes.
Tillery told The Current GA that the “cool” part of his plan is that it could be instituted now, while the hard policy debates could be delayed. “You could actually wait until you’re in a stronger political position in year two to actually address [credits and exemptions],” he said.
While he has not published a plan or bill with specifics about how the state should make cuts, the Tax Expenditure Report offers list of what’s possible — whether it’s good, wise or popular policy is a different question.
Georgia could find $4.6 billion if it taxed the machinery, supplies and equipment that manufacturers use to make anything from toilet paper to cars. However, economists say regular Georgians would end up paying for that change through higher retail prices.
The state could also find revenue by taxing services offered by companies in the state. By and large, Georgians don’t pay sales taxes on manicures, haircuts, tattoos, legal advice, dental exams, and the like. Instituting those kinds of taxes would be a huge change that doesn’t have strong champions in the Republican-led state legislature.
Such radical change would likely rile up professional groups and their lobbyists, small business owners and every constituent who begins to understand that medical bills might be taxed.
More valuable to the 1%
Meanwhile, some economists are already lining up to detail all the ways in which Tillery’s proposal would hurt Georgians, not help them.
Ending income taxes “is not fiscally possible without leaving most Georgians worse off economically,” said Danny Kanso, the vice president of public policy at the nonprofit Georgia Budget and Policy Institute. The think tank has opposed eliminating state income taxes for years, on the grounds that the biggest benefit would go to people with the biggest incomes.
State data shows that state income tax bills for most Georgians range from a few hundred dollars to about $8,300 each year.
The top 1% of earners, however, pay on average $33,135 or more in state income taxes.
Kanso says it’s not possible to recoup what would be lost from ending state income taxes and keep the same level of services provided by the state without raising taxes in some other way. In places like Florida, Tennessee and Texas, which don’t levy state income taxes, residents pay higher sales taxes, for example.
A closer look at loopholes
Each year, the state legislature directs state auditors to evaluate a few of the state’s special tax treatments. Auditors measure how much the tax measures cost the state, versus its benefits.
Looking at the impact of the film tax credit, for example: auditors found that 92% of film work in Georgia could be attributed to the special tax credits. If that loophole is closed, filmmakers would be very likely to leave the state for higher subsidies elsewhere, the auditors concluded.
Airlines, on the other hand, would not be expected to rush to abandon Atlanta’s massive airport if the state forced a sales tax on jet fuel, the auditors concluded. However, the amount of money that such a new tax would earn the state ‚ about $64.8 million, is a drop in the bucket for total state revenues.
Non-profit hospitals are exempt from many state taxes which add up to about $170 million a year. But the payoff isn’t commercial, it’s community: those hospitals must provide public benefits such as charity care, community health improvements, professional education, subsidized health services, and research.
Other Republicans, other plans
It’s unclear how far Tillery’s proposal will go during the legislative session this spring, given that there is plenty of competition for spending the state’s budget surplus.
Outgoing Republican Gov. Brian Kemp has already proposed tapping into reserves for a one-time rebate for taxpayers; and a budget that would fit in a new, smaller income tax rate of 4.99%.
House Speaker Jon Burns meanwhile has proposed cutting property taxes, not eliminating income tax.
And it is very hard to change special tax treatment, even for something as unpopular as data centers.
In 2024, legislators voted to pause special tax treatment for data centers. Gov. Brian Kemp vetoed that. For more than a decade, Georgia Republican leaders including Kemp have repeated that Georgia is the No. 1 state for business, citing a trade magazine ranking. Low taxes are Georgia’s selling point.