Constituent policy

Letter asking lawmakers to reject risky flat tax

At a time when key Georgia lawmakers have the option of better funding basic services that promote economic opportunity or passing widely popular tax cuts for low- and middle-income Georgians, the General Assembly is instead proposing a legislation (House Bill 1437) which would primarily reduce taxes for the wealthy. We call on lawmakers to reject a flat tax.

Dear Chairman Hufstetler, Vice Chairman Albers, Chairman Blackmon, Vice Chairman Smith, and members of the Senate Finance and Ways and Means Committees:

At a time when key Georgia lawmakers have the option to better fund basic services that promote economic opportunity or enact widely popular tax cuts for low- and middle-income Georgians, the General Assembly is instead proposing legislation which would mainly reduce taxes for the wealthy.

House Bill 1437 significantly rebalances the tax code in favor of the wealthiest due to the flat tax rate proposed in the package. It costs more than $1 billion a year, threatening to jeopardize funding for public education and health care. Although some provisions of the legislation – such as increasing the standard exemption available to all taxpayers and eliminating most itemized personal income tax deductions – would provide positive benefits to Georgian families if they were isolated, the package tilts significantly towards high earners due to the inclusion of a flat tax that increases the cost of the legislation by about $645 million a year. Because of historical and systemic policies that have contributed to declining income and wealth levels for black and brown Georgians, this flat tax proposal would also deepen racial inequality and widen the racial wealth gap.

The package also jeopardizes the state’s ability to fund basic services and programs for Georgians. The bill would also cost more than $1 billion a year, more than Georgia spends each year on the entire Department of Human Services, the ninth-largest agency in the state. This legislation, as written, could compromise our ability to fund our public education system, our health care system and much more.

Maintaining a progressive income tax, where tax rates increase with income levels, is key to preserving the fairness of Georgia’s tax code, rather than asking the state to charge more to low- and middle-income Georgians so that higher earners can pay less. Rather than moving to a flat tax, lawmakers can also provide tax relief that better targets low- and middle-income Georgian families by modernizing the progressive state income tax to better reflect income distribution.

Although some aspects of HB 1437 would improve Georgia’s tax code, the bill is rendered unnecessarily expensive and retrogressively harmful by the inclusion of a flat tax. Lawmakers should reject this measure as passed by the House of Representatives and focus on passing tax measures that improve the tax code for low- and middle-income Georgians. One of the best ways to make the tax code fairer is to enact an Earned Income Tax Credit (or Georgia Working Credit) that would put money in the pockets of low- and middle-income Georgian families. , rather than focusing limited state resources on enriching high earners. By also prioritizing common sense measures to increase revenue alongside these changes, tax reform can be accomplished without compromising the ability of the state to meet its obligations.

Truly,

9to5, Georgia Chapter of the National Association of Working Women

CAIR-Georgia

Catina Daycare

Coalition for the People’s Agenda

Community Foundation for Greater Atlanta

deep center

faith in public life

Georgian Institute of Budget and Policy

Georgia Equality

Georgians for a Healthy Future

Intercultural Development Research Association

The Latin American Association

United Campus Workers of Georgia

YWCA of Greater Atlanta