Stacey Abrams on Georgia tax rate cut bill

Abrams shifts, says she would now let Georgia’s income tax cut stand

Democratic gubernatorial nominee Stacey Abrams was critical earlier this year when lawmakers voted to cut top state income tax rates, saying she would look to reverse the decision.

But Abrams, a former House minority leader, knows the political realities of trying to stop a tax cut at the statehouse, and she told The Atlanta Journal-Constitution she wouldn’t stand in the way of it if she’s elected governor.

“I do not believe it is feasible to repeal what has passed,” Abrams said. “As a matter of principle I think it is always dangerous to pass tax legislation without a full understanding of its consequences, and I believe the decision made by the Legislature was premature.”

In that Abrams and Republican Gov. Nathan Deal probably agree. But trying to halt a push to cut taxes in an election year is like stepping in front of a speeding truck and expecting it to stop.

The cut came about in large measure because of tax legislation that Congress passed in December.

The federal law produced a potential windfall for states because it limits or eliminates some of the deductions Georgians have used when figuring their state taxes in the past and made it far more likely that ratepayers will use the standard federal deduction, rather than lowering their state taxable income by using itemized deductions.

So while many Georgians will pay less in federal taxes, at least some could have wound up with bigger state tax bills.

Without making any changes, the state government could have wound up with a tax windfall. Still, Deal wanted to hold off on any major changes until the state could get a better read on the exact impact of the federal tax measure.

But Republican leaders in the Legislature, who had long coveted cutting the 6 percent maximum state income tax rate, saw an opportunity.

They approved an increase in the standard deduction for Georgians when they do their taxes, as well as a reduction in the top state income tax rate to first 5.75 percent, then 5.5 percent. Combined with other tax changes made by the state and federal government, the tax measure is projected to reduce state revenue by $467 million in fiscal 2021 and $340 million in fiscal 2022.

In March, after the vote on the state tax measure, Abrams said she would push to reverse the cuts  and funnel the extra cash instead into “real programs that would advance economic justice.” Her top priority was expanding Georgia’s Medicaid program, which Republicans have resisted over fears of escalating long-term costs.

But Abrams also knew even many of her former Democratic colleagues in the state House and state Senate would be hard-pressed to go along with her on this one.

“My mission is to make sure we put money into the pockets of hardworking Georgians,” Abrams told the AJC, “but that we also invest in the core necessities to make our state strong. That means expanding Medicaid, that means paying our teachers more, that means improving our investment in our education system.

“My intention is to spend every single year as governor looking at revenue estimates, looking at our tax laws, making sure we are protecting our AAA bond rating. That is a comprehensive responsibility that shouldn’t anticipate what we think might happen but should be based on the best evidence.”

Despite that criticism, Abrams said, “I do not intend to offer legislation to repeal what was done this year.”

Cody Hall, the press secretary for Kemp, said Abrams comes late to her decision.

“Stacey Abrams is campaigning on an extreme agenda to raise taxes on hardworking Georgians,” Hall said. “She was against the tax cuts when they passed and even opposed them on television during a live debate.

“Now that her campaign is sinking under the weight of multiple scandals and her extreme voting record, Abrams is desperately hoping to fool voters with empty rhetoric. It won’t work.”

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