Autumn A. Arnett
Georgia Gov. Brian Kemp wants the state Legislature to consider lowering the state income tax rate in 2024, citing a huge surplus in the state’s budget for 2023.
Prior to 2024, households were taxed on a graduated system where those with higher incomes paid higher tax rates, but changes to the tax code set to go into effect this year — signed into law by Gov. Kemp in 2022 — would shift to a flat tax model. Under the new policy, all Georgia residents are scheduled to pay a 5.49 percent tax rate across the board in 2024, with the amount set to decrease by an additional .1 percent each year until it reaches 4.99% in 2029.
This represents a sharp increase for many; most households amassing less than $250,000 per year currently pay less than 5.49 percent in state income taxes; according to the 2020 U.S. Census, only the top 5 percent of Georgia households bring in more than $233,979. Previously, Georgia’s top earners paid up to 5.75 percent, while those who brought home the least paid as little as 1 percent.
Citing a large surplus in the state’s budget again in 2023, Governor Kemp’s office wants the Legislature to consider accelerating the decrease to 5.39 percent this year — the rate it was previously set to reach in 2025.
House Bill 1015, which accelerates the rate cut, is currently making its way through the state Senate and was passed by the House with a 165-0 vote.
“Cutting taxes and returning more money to taxpayers continues to be a priority for the Georgia House of Representatives, and today’s passage of HB 1015, HB 1019, and HB 1021 will help return over a billion dollars to Georgia families, homeowners, and taxpayers alike,” Speaker of the House Jon Burns, R-Newington, said in a statement. “These priorities will deliver significant relief to taxpayers across the state, put more money back into their pockets, and continue to boost our economy as the best state in the country to live, work and raise a family — and I look forward to quick passage by the Senate and signature by Governor [Brian] Kemp.”
Income equality advocates say the plan exacerbates inequalities and places an unfair share of the tax burden on those who need the most help.
Hope Wollensack, executive director of the Georgia Resilience and Opportunity Fund, says the proposed tax cuts are “not proportionate to the cost and expense burden that low-income households share” and argues “a much higher share of that savings should be going to households that should be saving the most.”
Policy ‘Rooted in Anti-Blackness’
Wollensack points out that these households are also most likely to be impacted by the longer-term effects of an overall tax cut; with public education and health care already severely underfunded in the state — and residents with the lowest incomes most likely to have worse schools and less access to quality health care — she says residents should be concerned about how the proposed cuts impact state revenue down the line.
“For your average person who is working day to day, they probably care most about what they can personally save,” she told Atlanta Black Star. “Our public policy dictates who has access to certain resources … and that often dictates who gets to the top.”
“We have this really embedded notion that folks in the top 1 percent – 10 percent [of income], they deserve it. They’ve worked hard, they’ve pulled themselves up by their bootstraps, and they deserve extra benefits than those at the bottom who have not worked as hard to get there,” Wollensack said, adding that this idea of meritocracy ignores the embedded structural racism that exists historically in the tax code.
And they’re “rooted in anti-blackness that’s as old as this country,” said Wollensack.
How Can Tax Policy be Racist?
How can tax policy be racist? When one follows the through-line of the history of taxation back to the founding of this country and the taxing of property — and remembers that enslaved people were considered property in the South — it becomes a bit clearer.
“Tax policy is not race-neutral,” says Alex Camardelle, a former senior analyst at the Georgia Budget Priorities Initiative who is currently serving as Vice President of Policy and Research at the Atlanta Wealth Building Initiative. “The history of the tax code is one that’s rooted in white supremacy, given its longstanding ties to property ownership [including human beings as property]. I don’t think we’ve necessarily reckoned with that. We have to consider race whenever we’re thinking about changes to the tax code and the implications for black folks in particular, who[se] are the lowest wealth households in this country.”
“I think that’s one of the reasons why the flat tax is not ideal because it doesn’t do enough to recover the loss taxes from the wealthy who are also benefiting from tax credits and other loopholes that could be put towards revenue,” he told Atlanta Black Star.
Both Wollensack and Camaradelle agree that the tax code is intentionally complicated and designed to be misunderstood, however those with more resources are in a better position to hire professionals to help them identify and exploit potential loopholes that lower their tax obligations.
The complex system of tax cuts and loopholes are “blunt instruments that can be used to exacerbate the inequities,” Camaradelle said.
“Our tax code is incredibly complicated, so when you factor in all of the deductions and tax breaks built into the code, it can be difficult to follow,” Wollensack said. “For your average person who is working day to day, they probably care most about what they can personally save [but] … I think we need to start asking and demanding more.”
Moving in a Better Direction
Georgia is one of 20 states that doesn’t offer a state-level earned income tax credit — a tax break offered to low- and moderate-income individuals to lower their taxable income and help them retain more of their earnings in their household.
Wollensack said if state officials really wanted to help the most vulnerable populations, they would consider implementing the credit, which would benefit 3.5 million Georgians who need help the most.
She is also an advocate for redirecting some of the state’s revenue surplus to provide direct cash payments directly to families, which would disproportionately affect Black families in the state.
Former Atlanta Mayor Keisha Lance Bottoms was part of a group of mayors nationwide who advocated for a guaranteed income program that would do exactly that.
Though it failed to gain statewide traction and the funding needed to sustain the program, the Georgia Resilience and Opportunity Fund is currently overseeing a pilot guaranteed income program that provides between $850 – $1,000 per month for residents, many of whom are Black women.
What they have found is that food insecurity has decreased by roughly 20 percent, families’ ability to pay medical bills has increased by 14 percent, and educational enrollment has doubled. Mental health has also significantly improved, and many have seen their savings double, putting them in a better overall position to manage household needs.
“There could be a lot of scenarios where the $16 billion [surplus] is really concentrated towards the half of Georgians with the lowest incomes — not just folks experiencing poverty, but into the middle class,” says Wollensack.
Camaradelle says it is important for a tax policy to be intentional about the ways it both generates revenue for the state and remedies the inequities that have existed for generations. The current policy, which would subtract $1 billion per year from the state’s revenue, is “ultimately going to limit our potential to grow our revenue [and will have] a long-term effect on all of the state’s publicly-funded resources,” like education, health care, and other infrastructure investments, he said.
An ideal policy to him “recovers and addresses the under taxation of ultra-high wealth individuals who are not paying their fair share.” He points to states like California and New York, which have implemented wealth taxes to try to distribute the burden more equally.
“As we think about taxes and who benefits from that and who doesn’t, Black folks … feel the brunt from not raising taxes and through other means too,” said Camaradelle.
