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Tax cut clears General Assembly in last hour of 2022 session
Georgia lawmakers approved a tax cut Monday night during the final hour of this year’s General Assembly session.
After the state House of Representatives voted 167-2 to support a compromise version of the legislation reached by a joint conference committee, the state Senate followed by a margin of 41-13.
The bill includes a phased-in rollback of Georgia’s income tax rate from 5.49% to 4.99% over six years, starting with the 2024 tax year. The current tax rate is 5.75%.
Democrats had blasted the original version of the bill proposed by the legislature’s Republican majority, which would have dropped the tax rate to a flat 5.25% immediately upon taking effect, arguing some Georgians actually would end up paying higher state taxes.
“We haven’t been able to find anyone who pays more,” House Ways and Means Committee Chairman Shaw Blackmon, R-Bonaire, said of the compromise bill. “Everybody pays zero [more in taxes] or less under this plan.”
The bill also includes a trigger mechanism to make sure tax cuts don’t continue if the economy falters. Taxes would not be reduced in any year where state revenues don’t grow by at least 3% or the year’s net revenue collections are not higher than those of each of the previous five fiscal years.
“If the triggers aren’t met, it will pause a year,” said Senate Finance Committee Chairman Chuck Hufstetler, R-Rome.
The legislation also increases taxpayers’ personal exemptions. Single filers will get an exemption of $12,000. Exemptions for married couples filing jointly will increase every two years, from $18,500 in 2024 to $24,000 in 2030.
Hufstetler said the tax cut will cost the state $455 million during its first year and $1 billion during the second year.
Danny Kanso, senior tax analyst with the Georgia Budget and Policy Institute, said it will end up costing more than either version of the bill the House and Senate passed earlier in the session.
“Lawmakers are skewing the tax code so that the wealthy get massive tax cuts and would not have to pay their fair share, but only paying lip service to support for low- and middle-income families,” he said.
Kanso noted the final version of the bill does not include a state-level Earned Income Tax Credit, which had been included in the Senate version.
But Blackmon said the tax cut has something for all taxpayers.
“This bill puts $1 billion back in the pockets of hardworking Georgians,” he said.
The legislation now goes to Gov. Brian Kemp, who is expected to sign it.
This story comes to GPB through a reporting partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.