Gov. Brian Kemp has announced a goal to speed up the reduction in personal income taxes that was approved last year.
The process will mean amending HB 1437 during the 2024 session of the General Assembly that begins in January. It provided for stepping down the income tax rate by ten basis points incrementally, beginning in 2025 and continuing by 0.1% annually until the rate, currently 5.75% on incomes over $7,000 a year, reaches 4.99%.
“When I signed the largest income tax cut in state history in 2022, I did so with the understanding we would deliver on this promise in a responsible way,” said Kemp in the Dec. 4 announcement. “Now, thanks to our conservative budgeting and strong state economy built on business-friendly policies, we are well-positioned to move the timeline up and put more money where it belongs — back into Georgians’ pockets.”
If passed by the legislature, the new decrease will drop the rate for tax year 2024 to 5.39%. The Office of Planning and Budget estimated the change will result in a savings of $1.1 billion for Georgia taxpayers in 2024.
Lt. Gov. Burt Jones, Speaker Jon Burns, and members of the general assembly joining Kemp as he made the announcement.
Jones would like to eliminate the state’s income tax, which he called his top priority.
“I commend Governor Kemp and members of the legislature for strategically putting our state in the position to give more money back to every Georgian,” he said. Along with the announcement today and the work of the Joint Tax Review Panel, I am confident we will identify additional ways to improve our tax structure and keep Georgia the best place to live and work.”
Representative Barry Fleming (R- District 125), speaking to the Columbia County Chamber of Commerce last month, supported eliminating the personal income tax.
“It is Georgia versus everybody,” he said when trying to attract new businesses. “But there are some states that stand out in particular and that is Florida. Or Texas? What do they have in common? They don’t have an income tax. When you’re at a Fortune 500 company or a significant company, and you’re thinking about where to relocate your business, something about going to a place where you don’t have to pay these taxes is the great thing.”
In addition to accelerating the reduction of income tax rates, the change would increase the standard exemption. Single taxpayers would receive a $12,000 exemption immediately. The exemption for married couples will increase incrementally until maxing out at $24,000 in 2030. Additionally, taxpayers will be able to deduct $3,000 for each child or dependent.
“This is what happens when you budget conservatively,” Kemp said. “This is what happens when you think long-term rather than make knee-jerk fiscal decisions without consideration of the impact that will have on the state.”
For the past two years, Georgia has been able to use surplus funds to pay out $1.1 billion in tax rebates. A Kemp spokesman said the governor has not decided whether to also seek another rebate.
