Georgia can’t afford to eliminate income tax, but we can make rates fairer
Right now in Georgia, lawmakers are debating the elimination of our state income tax.
At a moment when families are struggling with rising housing costs, transportation expenses and child care bills, that idea may sound incredibly appealing.
But in reality, it would make Georgia less affordable for most people – and far more unequal.
The problem isn’t that Georgia taxes income. The problem is how we tax income.
When our state moved from a progressive tax system to a flat income tax in 2022, it created an unequal upside-down triangle of burden for working-class families. The average, working-class Georgian now pays nearly 10% of their income in state and local taxes, with the wealthiest 1% only paying around 5%, according to the Institute on Taxation and Economic Policy.
Overwhelmingly, Georgians believe the wealthy are not paying their fair share – and the data backs them up.
Eliminating the income tax would push Georgia in the wrong direction, creating a massive deficit in our state that would lead to higher consumption taxes, more profound inequality, and fewer resources to invest in children and working families. That means working families would pay more, not less.
Progressive taxation leads to better quality of life
But there’s a better alternative: Georgia should do what most states with an income tax do – right-size our tax code by putting thousands back in the pockets of middle-class families while ensuring the wealthiest Georgians contribute their fair share.
And Georgians are not alone in these thoughts. Organizational partners like State Innovation Exchange are tracking and supporting hundreds of similar bills state legislators are championing across the country. Americans of all backgrounds have the same demand – that the ultra-wealthy pay their fair share in taxes.
A recent multistate analysis by the State Revenue Alliance found that states with more progressive tax systems – where high earners pay a higher share of their income – tend to score better on measures of quality of life and economic opportunity.
This evidence directly challenges the notion that lowering or eliminating the income tax would somehow make Georgia more prosperous. Instead, a more equitable income tax would allow Georgia to pay for what our communities need.
Our state deserves quality roads, excellent schools, well-funded public safety, and adequate health services for all.
SB 520 would address inequities and keep Ga. funded
Under the proposal I am sponsoring (Senate Bill 520), only the richest 5% of Georgia households would pay a 6% income tax rate, and the average Georgian would see their income tax rate fall below 3%.
By progressively taxing income at rates between 2% to 6% and significantly raising the standard deduction, our plan lowers state income taxes by 43% on the first $50,000 in income for single Georgians ($816 in savings) or $100,000 ($1,632 in savings) for married Georgians. Families with children under 6 would see at least $1,000 more in savings per child.
And let’s be clear, tax reform must go hand-in-hand with policies that directly reduce poverty and reward work. I propose instating a refundable state Earned Income Tax Credit of up to $1,600 that will give working Georgians the boost they need to afford reliable transportation, find affordable housing, or build financial stability.
Additionally, I want to expand the child tax credit to $1,250, dramatically reducing childhood poverty. A family of four with two children under age 6 would see their annual incomes raised by up to $4,000 in fully refundable tax credits under this plan. As two of the most effective anti-poverty tools we have at our disposal, we should be utilizing these refundable credits to their fullest potential.
This is how we give families a break in their monthly expenses – not by following the lead of states like Mississippi and South Carolina racing to repeal their income taxes.
Too often, Republicans promise prosperity by cutting taxes, but the reality is it rarely works for most states. Republicans continue to push a failing model of tax reform that leaves glaring inadequacies in funding for crucial services like health care and education, while ultimately hurting working families.
Meanwhile, progressive states that have increased top tax income rates frequently outperform on measures of quality of life, economic opportunity, and investment in families and schools.
This isn’t a vague promise. We know these policies work. Let’s ditch our upside-down tax system and move to one that ensures that those at the very top pay their fair share and every child gets the opportunity to thrive.
State Sen. Kim Jackson, D-Stone Mountain, represents District 41 in the Georgia Senate and serves in leadership position of minority whip.
