As most readers are probably already aware, Georgia state lawmakers are in the process of debating major tax reforms. Of course, any type of tax reform is bound to be controversial, so it is not surprising that proposals to dramatically alter the tax code here has spurred public debate.

Tax law changes are very important to both individuals and business owners in the state of Georgia, since the changes that lawmakers enact will likely have a very real impact on their bottom line. For families, a change to the tax code could help make it easier to make ends meet, and for businesses, the right types of alterations and incentives could help them hire new employees. Needless to say, everyone has their own opinion on the best way to accomplish these goals.

A recent study from the Georgia Budget and Policy Institute seeks to clear up some of these issues and offer concrete analysis of the changes that have been proposed. The report found that an idea to abolish the six percent state income tax entirely would have a big impact on the budget, so much so that lawmakers would have to raise the combined state and local sales tax to more than double the current rate to make up for lost revenue. The sales tax is currently at seven percent but experts say an increase to 14.5 percent would be necessary.

The author of the study said that the impact would be greatest for low and middle-income families who would shoulder a much larger portion of the tax burden than they do under the current rates. 

 

Source: Atlanta Business Chronicle, "Study: Cutting income tax would hurt Georgians," Dave Williams, Aug. 7, 2013.