atlanta — Eliminating state income taxes sounds great to many voters, but Republicans support the approach In multiple states They still face questions about whether such deep tax cuts can be made without raising other taxes or sharply cutting government funding for education, health care and other services.
Georgia on Wednesday became the latest state to launch a bid to eliminate the personal income tax, as Senate Republican leaders backed a proposal to eliminate it by 2032. This year, Georgia’s personal income tax is expected to raise about $16.5 billion, or 44% of the state’s general revenues.
The motivation behind this is politics. Lt. Governor Bert Jonesthe Republican who leads the state Senate, has made eliminating income taxes a centerpiece of his 2026 campaign for governor. State Senator Blake Tillerya Republican from Vidalia who led a committee to repeal the tax, is among the candidates to succeed Jones as lieutenant governor.
“This is the first vote we will take to address the issue of affordability,” Tillery said.
But it is unclear whether the proposal will pass. Georgia House Republicans may want to continue taking up the tax in smaller amounts, preferring a “thoughtful” approach. Republican House Speaker John Burns of Newington said Wednesday that his big goal for 2026 is to eliminate property taxes on homeowners, but said he’s willing to consider the Senate’s plan.
Republican governor Brian Kempwho is serving his final year, has been cool about the complete abolition of the income tax. He declined to comment Wednesday on the Senate’s plan, but spokesman Carter Chapman said Kemp wants to “continue to cut taxes and put more money in the pockets of Georgians as he has done throughout his term.”
The state’s Democratic minority opposes the move, saying it would mostly benefit high-income earners and that the state needs money to provide services.
Iowa, Kentucky, Mississippi and Missouri have all set goals to eliminate the personal income tax, joining eight other states that do not levy personal income taxes. Eight other states besides Georgia are cutting personal income tax rates this year, according to the Tax Foundation, a group in Washington, D.C., that is generally skeptical of tax increases.
“We’ve seen a lot of states reduce their income tax rates in the last four or five years, especially during and coming out of the COVID-19 pandemic,” said Aravind Poddupally, a senior fellow at the Brookings Urban Tax Policy Center in Washington, D.C.
Supporters say the cuts help the state compete for residents and new businesses, pointing to growth in Texas and America Floridatwo states without personal income taxes.
“Your income tax is a tax on productivity,” said Manish Bhatt, who studies government taxes for the Tax Foundation. “If you tax productivity, you’re likely to miss out on the economic gains.”
Georgia has Income taxes have already been cuttaking what was previously the top income tax rate of 6% and reducing it to a flat rate of 5.19%. Republicans widely support an additional cut for individual and corporate taxpayers to 4.99% this year, which amounts to an estimated $800 million in lost tax revenue.
The Senate plan would then freeze the corporate rate and focus on individual tax cuts. In 2027, he proposes to exempt the first $50,000 of income for a single person or $100,000 for a couple, up from $12,000 and $24,000 now.
In the face of criticism from Democrats about AffordabilityStill, the significant increase in exempt income is central to Republicans’ arguments about how to make more money. About 70% of Georgians reported less than $100,000 in taxable income in 2024, according to state figures.
“It’s a plan that provides benefits first to hardworking families,” Tillery said.
The initial rate cut, combined with the relief proposal, would cut Georgia’s revenues by $3.8 billion in its 2027 budget year. Tillery says the state could pay using surplus tax revenue and return to paying capital expenditures through borrowing rather than cash. But these moves probably won’t cover the revenue lost even in the first year, let alone the additional $13 billion in cuts to get to zero.
Tillery said revenues should be boosted by reducing business income and sales tax breaks, saying lawmakers should reduce “corporate welfare.” but Legislators and Kemp It has refrained from reducing those measures in recent years.
Tax cuts have not always been a political bonanza. In Kansas, after Republicans under Gov. Sam Brownback sharply cut income taxes more than a decade ago, voters revolted over budget cuts and lawmakers imposed multiple tax increases to cover persistent budget shortfalls, including – Restore some income tax cuts. Democratic Gov. Laura Kelly She won her first term in 2018 By framing race as A referendum on Brownback’s policies.
“State income taxes are only bad if you fundamentally don’t believe that the services, the public investments that state governments make, are worth anything,” said Matt Gardner, a senior fellow at the left-leaning Institute on Taxation and Economic Policy.
In MissouriRepublican Gov. Mike Kehoe and GOP legislative leaders have made phasing out the state income tax a top priority for the session that begins Wednesday. They are looking to expand sales taxes to include currently untaxed services to help make up for lost revenue.
“We want to do this in a smart and efficient way that doesn’t send the state sliding into the fiscal cliff,” Missouri House Majority Leader Alex Reilly told The Associated Press on Tuesday.
But expanding sales taxes could fall more heavily on poorer taxpayers. The liberal-leaning Georgia Budget and Policy Institute estimates that if Georgia does not expand the sales tax, the combined state and local sales tax rate would have to rise sharply from the current rate of 7.42% to recover revenue losses.
All of this leads to questions about plans to eliminate the income tax, even from Republicans. Burns, the Georgia House speaker, said he was “open” to any plan that benefits Georgians.
“But we have to get the details, and it has to work,” Burns said. “We need to make sure we can continue to provide critical services — health care, public safety, education, all the things we talked about.”
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Associated Press writer David Lieb contributed from Jefferson City, Missouri.