The state income tax would be cut to 4 percent from 6 percent over three years under legislation introduced Monday afternoon by State. Rep. John Carson, R-Marietta.
House Bill 445 would increase the state sales tax to 5 percent from 4 percent and eliminate a number of tax breaks, including Delta Air Lines’ for aviation fuel purchases. The state income tax would go to 4.5 percent next year; 4.25 in 2017; and 4 percent in 2018.
Some observers saw the legislation as a way to build support for the plan to increase transportation funding, but House Speaker David Ralston, R-Blue Ridge, who appeared with Carson at a press conference, said he saw no connection between the two proposals.
“They’re separate measures, first of all,” Ralston said. “They’ve been working along sort of different tracks. I don’t know if there’s any real relationship.”
Despite reports that the House leadership is shy of votes for passage of House Bill 170, authored by Transportation Committee Chairman Jay Roberts, R-Ocilla, Ralston said that the bill has “gained some significant support over the last few days. …I think people are taking a long, careful look at the bill. People who might have had questions last week are saying now that they are satisfied with some of the changes Chairman Roberts has made.”
Ralston concluded, “I think the bill is actually gaining support and has since last Thursday.” Earlier in the day, Rep. David Stover, R-Palmetto, said on his Facebook page that he’s no longer a sponsor of the transportation bill, characterizing it as a $500 million tax increase. “I cannot and will not support any such increase on the backs of our citizens,” Stover wrote.
Ralston disputed Stover’s figure, standing firm behind his earlier statement that the transportation bill does not increase taxes.
Stover said in his Facebook post that because the local portion of the gasoline sales tax will remain, each Georgia driver will pay an additional $86 per year.
“This would not be an issue had we offset the tax burden on Georgian’s somewhere else,” he wrote. “It may not be an issue had the budget included increased spending for transportation out of the general funds.
“If we, as a Legislature, are going to ask our fellow citizens to pay more at the pump, then the state should be happy to drop some of its pet projects and dedicate more funding from the general fund towards transportation. The budget being presented to us this week did not even bother to move the fourth penny from the sale of motor fuel over to transportation. I cannot, and will not, support this bill in good conscience.”
Carson at the press conference called his bill the “More Take Home Pay Act” and said it would cut the income tax burden on Georgians by more than $2.5 billion. He said Georgia households of four bringing in $48,000, the median Georgia household income, will keep an additional $400 annually.
The legislation would phase in a state grocery sales tax over four years, reaching 5 percent in 2019. Carson said food stamp purchases would be exempt. The legislation also places the sales tax on digitally delivered goods such as downloadable software, e-books, music and movies, video games and apps.
Carson said tax exemptions that would survive include those for the movie industry. He said he wanted to preserve tax exemptions that increase jobs.
