Georgia Lawmakers Weigh Tax Reforms: Income Tax Cut vs. Property Tax Relief

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The Georgia General Assembly is considering two major tax reform proposals - the State Senate is championing the reduction and eventual elimination of the state's personal income tax, while the State House and Governor Kemp are proposing to phase in relief for property taxes paid on homesteads and single-family homes over six years. Both plans aim to reduce the tax burden on Georgians, but would impact state and local budgets differently.

Why it matters

Tax reform is a perennial political issue, with conservatives typically pushing to reduce taxes and liberals advocating to maintain funding for public services. The competing proposals in Georgia highlight this divide, as the income tax cut would primarily benefit higher-income households, while the property tax relief would aid a broader range of homeowners, especially those on fixed incomes struggling with rising home values and property taxes.

The details

The State Senate bill would eliminate job creation tax credits that have attracted major employers like Kia, Hyundai, and Rivian to Georgia, helping make it the 'Best State for Business' for 13 consecutive years. The House's 'Georgia HOME Act' would double the state homestead tax exemption every other year through 2032, with local governments able to adjust sales taxes and fees to make up the funding difference. Budget forecasters estimate the state revenue loss to local governments and school districts at around $5 billion per year.

• The Georgia General Assembly is currently considering these tax reform proposals.
• The 'Georgia HOME Act' would phase in property tax relief over a 6-year period.

What they’re saying

What’s next

The Georgia HOME Act would require a Constitutional Amendment, as well as a six-year phase-in period. The State Senate's income tax cut proposal would need to pass the legislature and be signed into law by the governor.