Top Republican lawmakers on Friday announced their support of a revised tax plan that would lower the individual income tax rate by nearly a quarter.
House Speaker David Ralston, R-Blue Ridge, and Senate President Pro Tem Tommie Williams, R-Lyons, said the new proposal would be a net tax cut for 90 percent of Georgians, make the state more competitive with its neighbors and attract jobs.
However, data released later Friday showed that taxpayers earning between $40,000 and $60,000 who itemize deductions would, on average, see a small tax increase.
The latest proposal -- to lower the rate from 6 percent to 4.6 percent in 2012 -- would cost the state about $130 million in lost revenue for the 2012 budget year that begins July 1. The income tax rate would decline to 4.55 percent in 2013. Over three years, the plan would cost the state, and save individuals and companies, about $310 million.
Gov. Nathan Deal, who supports the tax proposal, said Friday that state tax collections are increasing quickly enough that the state can cover any shortfall the plan creates.
But not everybody at the Capitol is on board at this point. House Minority Leader Stacey Abrams, D-Atlanta, whose criticism of earlier versions led to the latest changes, said she's concerned Republicans are moving too quickly.
Whether Georgians see a drop in the individual income tax rate in 2012 will depend on how fast lawmakers move in the final three days of the legislative session.
The plan had not been publicly released by late Friday afternoon. But the lawmakers said their new proposal -- the third revision in the past few weeks -- would be considered by a special joint House-Senate committee on Monday morning.
If the committee signs off on it, it would be debated and voted on by the full House that day. It would have to pass the House on Monday for the full Senate to have time to consider it before the 40-day session ends Thursday.
"This proposal puts Georgia on the road to a consumption-based tax system that will be flatter and fairer and away from a system that taxes productivity," Ralston said.
Tennessee and Florida do not have a personal income tax, and Alabama's rate is 5 percent.
House Majority Leader Larry O'Neal, R-Bonaire, a tax attorney, said Republicans had originally wanted to cut the tax rate to 4.5 percent -- from 6 percent -- but worries over the budget impact of such a move persuaded them to scale it back to 4.6 percent for now. The difference is about $100 million in tax revenue.
Ralston and Williams said their Republican colleagues are largely on board with the new plan, and they anticipate it will pass and reach Deal's desk by the end of the week.
Abrams, a tax attorney, said she could not immediately speak to the latest version because she hasn't seen it.
"Twice they've put out proposals that claimed to solve the problem, and twice now we've found their answers were wrong," said Abrams, who showed that earlier versions would have been a net tax increase for many Georgians. "I don't know if they believe third time is the charm, but I'm not willing to risk Georgia taxpayers' wallets on guestimations and magic."
Other than the income tax cut, the plan also would eliminate sales taxes on energy used for manufacturing. To help make up the lost revenue, the plan would require consumers to pay sales taxes on auto repairs (currently only auto parts are taxed) and private auto sales and create a new 7 percent tax on many communications services, including satellite television.
It also would do away with most income tax deductions but offer lump-sum exemptions that phase out for higher-income earners.
Staff writer James Salzer contributed to this report
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