Politics & Government

Tax Reform Legislation Appears Dead

Georgia House of Representatives fails to vote on measure before adjourning.

Georgia House Democrats are claiming victory now that HB 388, the tax reform legislation, appears dead for this session. Today was the last day the bill could pass the House and still have time to clear the Senate before the legislative session ends on April 14. The House failed to vote on the measure before adjourning for the day.

Democrats claimed the attempt at tax reform would have increased taxes for 82 percent of all Georgians and would have resulted in a multi-million dollar increase in the state deficit.

"The overall impact of the legislation would have been to increase the state's budget deficit by an amount ranging from $132.3 million to $151 million for calendar year 2012, during a time of slow economic recovery,” said House Minority leader Stacey Abrams in a released statement. “This proposal demonstrates fiscal irresponsibility, raises taxes on the majority of Georgians, and has no discernable impact on job creation."

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The includes a reduction in the Georgia personal income tax rate from 6 percent to 4.6 percent. HB 388 also allows itemized deductions up to $30,000 for married joint filers with Georgia adjusted gross income up to $75,000.  The deduction is phased out for those with an adjusted joint income over $177,000. A $35,000 per year retirement income exclusion is also maintained and the child dependent exemption would increase from $3,000 to $5,300 per child. On the revenue side, the bill includes a flat 7 percent tax on communication services, a tax on person-to person auto sales and a tax on automobile repair labor.

In an April 11 press release, Rep. Mickey Channell (R-Greensboro), co-chair of the Special Joint Committee on Georgia Revenue Structure, said the tax reform legislation takes into account the changing economic environment.

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“This final proposal is the culmination of countless scenarios that have been evaluated and re-evaluated to ensure that Georgia's citizens have a competitive advantage for the future,” he said.

Democratic Caucus Chairman Rep. Brian Thomas (D-Lilburn) said Democrats want meaningful tax reform for all Georgians.

"Tax and pretend economics will not work for the GOP and it won't work for Georgians. Democrats want to do that through an open and fair process," said Thomas.

Abrams echoed Thomas’ sentiments.

"State tax reform is not a bad idea but we cannot create a system of tax winners and losers, which is what HB 388 did. HB 388 created tax winners for upper income Georgians and made the middle class and working class tax losers," Abrams said. 


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