Republican Sen. Judson Hill hopes to do something for the people of Georgia that hasn’t been done in this state in 79 years — change the tax rate. Hill, Chairman of the State Finance Committee, plans to introduce legislation today that would reduce taxes for the residents of Georgia from 6 percent to a flat 5.4 percent.
“We need to do all we can to reduce the tax burden on Georgia’s hardworking families, and my Tax Relief Act does just that,” said Sen. Hill. “Revising our current tax law would allow Georgians to keep more dollars in their pockets and make their own decisions on whether those dollars should be saved, invested or spent.”
The bill, the Tax Relief Act of 2016, would not only reduce the personal income tax to a flat 5.4 percent, it would also increase the personal exemptions per person by $2,000. It would also limit some itemized deductions, Hill said, but would still preserve all deductions for charitable contributions, medical expenses and most mortgage interest and property tax deductions.
Hill said the bill would also eliminate both the marriage penalty and corporate net worth tax while maintaining the current sales tax base and rate.
Georgia’s current rate of 6 percent is among the highest rates in the southeastern United States. Hill said the reduction to 5.4 percent would bring Georgia’s rate below North Carolina and South Carolina, and would increase Georgia’s visibility among the most competitive states for business.
Hill, who believes he has strong support among other Senators, hopes for a companion bill in the House — where all “money bills” are supposed to originate.
“But this allows us to start the conversations,” he said.
Hill is also planning to introduce a constitutional amendment that would lower the tax rate even further — based on several triggers. According to Hill, if the state’s revenue reaches $23 billion and the “Rainy Day Fund” reaches $1.7 billion or higher, the tax rate would drop another two-tenths of a percent to 5.2 percent. Another reduction to 5 percent would be automatically triggered if revenues reach $23.6 billion and the “Rainy Day Fund” is $1.7 billion or higher.
Unlike revenue bills, constitutional amendments can originate in the Senate.
“My objective is to keep a promise to my constituents,” said Hill, who represents the 32nd Senate District which includes portions of Cobb and Fulton counties.
The Tax Relief Act of 2016 will also simplify administrative measures and reporting for small businesses that currently make up approximately 60 percent of Georgia’s businesses, to eliminate the corporate net worth tax.
