by Nyamekye Daniel
The Georgia Senate has approved a bill that collectively would cut income taxes for individuals by more than $600 million over the next five years.
House Bill 593, dubbed the Tax Relief Act of 2021, raises the standard deduction on state income tax returns for a single taxpayer by $800 to $5,400 and by $1,100 to $7,100 for a married couple filing a joint return, starting in the 2022 tax year.
The Senate approved the bill, 35-15, on Thursday, and it now heads to Gov. Brian Kemp for final approval.
“I think it’s incumbent upon us as state legislators to be fiscally responsible and to be conservative anytime we ask our citizens to remit their hard-earned dollars to the state treasury,” said Sen. Larry Walker III, R-Perry, who presented the bill.
The state auditor’s office and budget office said the bill could save taxpayers $58 million in 2022 and more than $140 million each year through 2026, for a total tax cut of $631 million over five years. Some critics said the tax cut could cost the state more in the long-run.
“Although raising the standard deduction helps deliver up to a maximum $63 to couples, this bill risks much-needed federal funding and could cost up to $199 million over the next two fiscal years,” the Georgia Budget Policy Institute tweeted Thursday.
If HB 593 becomes law, it would be the second tax cut of its kind in three years. The Georgia Legislature doubled the state’s standard deduction under the Tax Cuts and Jobs Act in Georgia in 2018.
HB 593 ignited a Senate debate over the role of government and government spending. Some lawmakers said they would not support HB 593 because it would jeopardize state revenue that could be used for public services.
Sen. Sally Harrell, D-Atlanta, said she opposed the bill primarily because it would increase the wait time for disabled people on standby for support services.
Sen. Elena Parent, D-Atlanta, said Georgia should consider other tax relief reforms and federal support from the American Rescue Plan Act, which was passed by Congress and signed by President Joe Biden on March 11.
“There is a huge incentive and a sweetener, specifically for Georgia in the American Rescue Plan, and I am speaking of the $1.4 to $2 billion that we will get,” Parent said.
States that fully expand Medicaid under the American Rescue Plan could receive the additional federal dollars for two years.
Parent also said Georgians could find more tax relief through the state earned income tax credit.
More than 400,000 Georgians claimed the federal earned income tax in 2018, when the average credit for each household was $2,807 per year, GBPI said. State Democrats have pushed a 10% state earned income credit for low-income Georgians.
Sen. Greg Dolezal, R-Cumming, reminded lawmakers the tax revenue belongs to taxpayers who work to accrue the funds.
“I am offended at the notion that somebody in this building thinks that they are going to put something back in my pocket because it was never theirs to begin with,” Dolezal said. “Taking less is not putting something in your pocket. Taking less is not giving. It is simply taking less, but it is still taking.”
The House unanimously approved the bill, 171-0, on March 3.
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Nyamekye Daniel has been a journalist for four years. She was the managing editor for the South Florida Media Network and a staff writer for The Miami Times. Daniel’s work has also appeared in the Sun-Sentinel, Miami Herald and The New York Times. Daniel is a staff reporter for The Center Square.
Photo “Georgia Capitol” by Autiger. CC BY-SA 2.0.