10/4/2023 0 Comments Flat tax examplesThis sensible reform provides a modest benefit to working families over the long haul, though the change will also gradually swell the long-term cost in lost revenue. This would slowly increase the size of Georgia’s tax shield, or the amount of income families can make before owing the state’s personal income tax. The revised version of HB 329 proposes to gradually increase Georgia’s standard deduction, personal exemption and dependent exemption by indexing them to inflation. A proposal to index broadly available deductions to inflation.An overdue fix to the double deduction loophole that allows some taxpayers to deduct the value of their state income taxes twice.A new nonrefundable Earned Income Tax Credit set at a 10 percent match of the federal credit.A flat tax of 5.4 percent to replace Georgia’s graduated structure with rates from 1 percent to 6 percent. Some details on the fourth item, new since the original proposal was filed, are included below. The first three reforms are explained in more detail in our full five-page analysis of HB 329. The substitute version of House Bill 329 includes four key income tax alterations. Revised Tax Package Proposes Four Big Changes Lawmakers can consider targeted fixes to the bill to avoid doing more harm than good. Though not as costly as some other recent tax makeover proposals, HB 329 could also cause some headaches for Georgia lawmakers in future years as lost revenue accumulates. In contrast, a proposed move to set a new a flat tax rate 5.4 percent provides an outsized gain to taxpayers at the very top and raises taxes for low-wage workers without children. Some aspects of the bill including a new Georgia Earned Income Tax Credit (EITC) and modest increases to personal exemptions and deductions stand to benefit many working families. Georgia lawmakers are considering a large income tax proposal that contains a mix of positive reforms and measures that raise significant concerns. Targeted Fixes Can Ensure Tax Package Does More Good Than Harm Analysis of Substitute Version of House Bill 329 (LC 43 0601S)
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