The Georgia Senate on Thursday approved two bills that would dramatically scale back the state’s individual income tax.
One bill would more than quadruple the standard deduction, potentially eliminating the income tax for nearly two-thirds of Georgians. An alternative bill would increase the deduction by a third, potentially eliminating the tax for about 15% of residents.
Supporters say the measures would put money back in Georgians’ pockets at a time when “affordability” is a top concern.
“The government can’t give you anything they don’t take from you first,” said Sen. Marty Harbin, R-Tyrone. “The money belongs to the people, not to the government, and we’re giving it back.”
Critics say the proposals would blow a multibillion hole in the state’s budget with no plan to fill it.
“Instead of delivering a real solution with real relief, this scam bill creates a massive hole in our state budget,” said Sen. Nikki Merritt, D-Grayson. “It’s going to be a hole so deep that it will swallow the services that everyday families rely on.”
Thursday’s vote was the latest step to advance Lt. Gov. Burt Jones’ proposal to phase out the personal income tax by 2032. Jones has made the proposal a centerpiece of his bid for the Republican nomination for governor.
Senate Bill 476 would reduce the income tax rate from 5.19% to 4.99% this year — a move proposed by Gov. Brian Kemp in January. It also would raise the standard deductions for the individual income tax. It would exempt the first $100,000 of income for married people filing jointly and exempt the first $50,000 of income for single filers, heads of households and married people filing separately.
A recent Senate committee report said raising the standard deductions would cost the state $3 billion in lost revenue in fiscal year 2027 and $6 billion the following year.
SB 476 would cover the first-year cost by eliminating or trimming about $2.8 billion in tax breaks on everything from data centers and insurance companies to medical equipment. After that, Jones’ plan calls for legislators to trim additional unspecified tax breaks in the future to cover the rest of the cost.
On Thursday, Sen. Blake Tillery, R-Vidalia, the bill’s sponsor, portrayed the vote as a choice between the middle class and big corporations.
“Are we going to vote to allow corporate welfare and corporate subsidies to continue at the expense of families who are trying to pay for gas, groceries and child care?” Tillery asked senators.
Democrats said the bill would decimate the state’s largest source of income with no specific plan to replace the lost revenue after the first year. They noted Senate Republicans introduced and approved the bill in a few days without first getting an analysis of its fiscal impact from the Governor’s Office of Planning and Budget.
Sen. Kim Jackson, D-Stone Mountain, said the long-term result of the income tax cut will be an increase in the state sales tax.
“Today, perhaps, for the first fiscal year, your $3 billion (in tax breaks) will work,” Jackson said. “But the second fiscal year we know your proposal costs at least $6 billion. And when we go to fill that in, it will be by taxing the things that my constituents need every day.”
The Senate also passed Senate Bill 477, an alternative proposal that would offer more modest tax relief. It would raise the standard deduction from $12,000 to $16,000 for single filers, heads of household and married people filing separately, and from $24,000 to $32,000 for married couples filing separately.
In addition to lowering the tax rate to 4.99% this year, SB 477 would reduce the rate to 4.49% next year and to 3.99% in 2028.
Both bills passed the Senate largely on party line votes. They now go to the House, where they’re likely to get a more skeptical reception.
Staff writer Maya Prabhu contributed to this report
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