ATLANTA — One thing that Georgia’s House and Senate can agree on after finishing the first round of this year’s legislative session is that the state income tax rate should continue falling.
Friday was the deadline for lawmakers to vote out the bills they were most serious about, moving them from the House to the Senate and vice versa.
The Senate had already sent legislation to the House last month that would cut the income tax rate to 3.99%.
On Friday, the House kicked a bill to the Senate with the same tax rate reduction and with an increase to the standard deduction that was similar to what was in the Senate bill.
Rep. Shaw Blackmon, R-Bonaire, the architect of the House measure, said it would cost the state $600 million in the first full year of implementation.
Democrats ridiculed the Republican plan, asserting that two-thirds of the tax cut would go to the wealthiest fifth of the population while leaving less money for services, such as education. Most Georgians might see a few hundred dollars while the rich would get thousands, said Rep. Sam Park, D-Lawrenceville, the House minority whip.
“We must stop these tax cuts for the rich if we want to lift all Georgians up.”
Republicans flipped the logic.
Rep. Chuck Martin, R-Alpharetta, said that if the top 20% would get two-thirds of the benefit, then they are paying that same proportion of the income tax now.
“The math goes both ways,” he said.
House Bill 880 then passed 102-69.
It would reduce the income tax rate a tenth of a percentage point per year, conditioned upon continued growth in state revenue, until the rate reached 3.99%.
The current income tax rate is 5.19%. But, last month, state representatives passed passed House Bill 1001, which would drop it to 4.99% retroactive to the start of this year. If the Senate embraces both, then it would take a decade to reach 3.99%.
HB 880 would simultaneously increase the standard deduction. It is $12,000 for a single filer now and would increase $600 a year until reaching $18,000 in a decade. These numbers would double for married couples filing jointly.
This approach differs only by degrees from Senate Bill 477 passed by senators early last month. Their approach would reduce the rate to 3.99% much sooner, by 2028. It would raise the standard deduction a little less, to $16,000 for individuals and $32,000 for married couples.
That 3.99% rate was the Senate’s second priority, the first being Senate Bill 476 to increase the standard deduction to $50,000 for individuals and $100,000 for couples.
To make both options palatable, the Senate handed the House what Sen. Blake Tillery, R-Vidalia, the designer of the two Senate bills, described as an “olive branch.”
He scooped out the contents of two unrelated measures the House had sent the Senate last year and, like a baker filling a donut with custard, squeezed in the language from the two Senate bills. House Bill 463 mirrors SB 477, and House Bill 134 copies SB 476.
So, now the House has two bills that would reduce the income tax rate to 3.99% — one that just reached the Senate and another that just got lobbed back from there.
Either by chance or design (probably the latter), HB 463 — the bill the Senate gutted before tossing it back to the House filled with a 3.99% income tax rate— was originally authored by Blackmon. He is the same state representative who rallied House Republicans to send HB 880, for a 3.99% tax rate, to the Senate on Friday.
There are bragging rights on the campaign trail for getting bills passed, and all seats are up for election this year.
Tillery, when he was asked about HB 880 versus HB 463 outside the Capitol Monday, echoed a line that is often attributed to Harry S. Truman.
“There’s no limit on what you can accomplish if you don’t care who gets the credit,” said Tillery, who is running for lieutenant governor and has spoken quite a bit about the Senate Republicans’ tax cutting agenda. “I don’t care who gets the credit.”
