As Georgia legislators look ahead to the next legislative session, it appears that the future of the state income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. is up for debate. Legislators are considering joining the seven states with no individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. —Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. From the Augusta Chronicle:
House Republicans meeting to elect their leaders for the coming legislative session pledged Monday to “dismantle the current tax code” and consider scrapping the politically unpopular personal income tax.
Republicans have already established several study committees and other initiatives to look into reforming the state’s tax structure.
“And when (House Ways and Means Committee Chairman Larry O’Neal) gets to that portion on the personal income tax, maybe we’ll just leave that section out and we won’t have that anymore in this state,” House Majority Leader Jerry Keen, R-St. Simons Island, said to loud applause during a GOP caucus meeting Monday.
House Speaker Glenn Richardson, R-Hiram, said after the caucus meeting that income tax revenues make up about half the state’s budget, which totals $16.7 billion in the fiscal year that ends June 30. He suggested that the plan could involve elimination of some of the exemptions to the sales tax.
Just doing away with the sales-tax exemptions wouldn’t be enough, said Alan Essig, the executive director of the nonpartisan Georgia Policy and Budget Institute, which supports closing sales-tax loopholes as part of tax reform.
Georgia’s individual income tax consists of six brackets with a top rate of 6% kicking in at an income level of $7,000. That top rate ranks 24th highest among states levying an individual income tax. In 2004, individual income tax collections were $766 per person, which ranked 19th highest nationally.
For more on taxes in Georgia, click here. Click here to view a table of individual income tax rates for all 50 states.
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