Income tax

Editorial: Other states have eliminated income tax and, with careful study, maybe Georgia can too

But it’s important to note here that the state doesn’t necessarily need to replace all income tax. The state government enjoys a large surplus of funds; returning some of that money to citizens and reducing taxes collected should be part of such tax reform.

In most discussions of eliminating income taxes, the most likely compromise is an increase in consumption taxes, such as the current state sales tax. Raising consumption taxes is almost a given if income tax disappears, but the question is how much can you realistically increase these taxes?

Consumption taxes are generally described as “regressive” in the sense that they have a disproportionate impact on those at the bottom of the salary scale, hence the need to consider exemptions for certain necessities such as than food and medicine when considering higher consumption taxes. . They can also negatively impact people on fixed incomes and retirees, who may not see as much benefit from the removal of income tax.

Remember, however, that if state income taxes are abolished, disposable income increases, so there is more money to spend on consumer goods and consumption taxes. And you decide for yourself what you can afford as a consumer, dictating what you pay in taxes, rather than having the government handle your tax burden for you.

Finding the right balance between an appropriate increase in state sales taxes and other consumer charges, and debating what should be exempt from those taxes, are the kinds of details that require a lot of legislative study and consideration. discussions before becoming reality.

Consumption tax increases are particularly effective in areas that attract a lot of tourists, as visitors leave behind tax money the state would not have collected otherwise. From Atlanta to Savannah, the mountains to the Golden Isles, Georgia’s tourism industry is among the best in the country.

The details of the income must be resolved if the income tax is to be abolished. No one is claiming otherwise, despite the cries of doom that have already surfaced from those who are convinced that the heavens are about to fall on the Georgian people.

While the revenue side of the picture can become clear, there are advantages to eliminating the state’s share of income tax.

Nine states, including Florida, Tennessee, and Texas, have figured out how to make it work. Studies such as 2018 ‘Rich States, Poor States’, conducted for the American Legislative Exchange Council, indicate that those who abolished state income taxes enjoyed higher overall growth, better paying jobs. and more wealth and economic strength. The council is a non-partisan organization of state legislators committed to the principles of limited government, free markets and federalism.

In the increasingly competitive market for good jobs, offering businesses and entrepreneurs a tax-free state is certainly a positive incentive, as is the case with those with high incomes or looking for a place to stay. retire.

We can only imagine how the elimination of state income tax could benefit huge rural areas of Georgia desperate for job growth and economic stability. These areas do not enjoy the same standard of living as residents of its metropolitan areas.

It is unlikely that the General Assembly will vote in the next session to abolish income tax, but discussion on this must take place, studies on income alternatives must be carried out and the groundwork must be laid. to do this happens at some point in the not too distant future.

Surely if our neighbors in Florida and Tennessee can figure it out, so can we.

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