ATLANTA — Georgians would get an income tax cut — or avoid paying the tax entirely — under a proposal unveiled by Republican Senate leaders Monday.
The cost would be paid in large part by eliminating or reducing a variety of tax breaks, including for data centers, low-income housing and yachts.
The plan calls for a dramatic increase in the amount of income exempt from taxation, to $50,000 for individuals and $100,000 for married couples. The state’s current standard deduction is $12,000 for individuals and $24,000 for couples.
Meanwhile, Georgia’s state income tax rate would drop from 5.19% to 4.99%
“Families in the middle class right now are having a hard time paying for gas, groceries, childcare,” said Senate Appropriations Chairman Blake Tillery, R-Vidalia. “What the Senate’s plan does instead is completely eliminates their income tax liability for families making less than $100,000.”
Families earning more than $100,000 would save an estimated $5,000 in income taxes, Tillery said.
The proposal cleared its first hurdle Monday by passing the Senate Finance Committee.
The income tax legislation, Senate Bill 476, is lawmakers’ latest attempt to prioritize affordability and cost of living.
Other bills are seeking to eliminate local property taxes and cap increases in assessed property values by preventing them from rising more quickly than the inflation rate.
Legislators are targeting a series of tax breaks to raise over $1 billion to help fund the income tax reduction.
Those tax breaks currently benefit data centers, businesses headquartered in Georgia affordable housing projects, small businesses in rural areas, life insurance companies, personal protective equipment manufacturers, medical equipment manufacturers, low-emission vehicles, cigarette exporters, boat owners and more.
Senate Minority Leader Harold Jones II, D-Augusta, said he supports eliminating state income taxes for families making less than $100,000, but said many Georgians would pay the price if other taxes have to be raised to make up for loss of government funding.
He said some of the tax breaks that would be reduced, such as the affordable housing credit, would harm residents more than lower income taxes would help.
“The problem with the bill is very simple: It’s going to create tax hikes. It’s going to create job loss,” Jones said. “This bill decimates the middle class. It really has severe consequences.”
A government accounting of the legislation’s costs hasn’t yet been completed.
In addition to SB 476, Tillery also introduced an alternate proposal that focuses on reducing the income tax rate without eliminating tax breaks.
That measure, Senate Bill 477, would lower the income tax rate to 4.99% starting this tax year, followed by reductions to 3.99% by 2028. The bill would also increase the standard deduction to $16,000 for individuals and $32,000 for married couples.
This story is available through a news partnership with Capitol Beat, an initiative of the Georgia Press Educational Foundation.