Watch CBS News

Georgia lawmakers explore plan to eliminate state income tax

Georgia's income tax rate is just over 5%, but some lawmakers want to take it to zero. State senators met this week to discuss how that could happen, launching a debate that has quickly drawn interest from business owners and families.

For the past 28 years, Longstreet Café in Gainesville has been a community gathering spot. Owner Justin Bunch said the café succeeds because, "the most important thing is supporting the community, and they support us."

gastateincometaxes.png
Justin Bunch, owner of Longstreet Cafe, serves food to guest while speaking with CBS Atlanta. CBS News Atlanta

Bunch said keeping meals affordable has become increasingly difficult as he and his customers feel the effects of rising costs.

"They just keep squeezing the dollar, and there's no more left," he said.

That's one reason he's paying attention to the State Senate's effort to eliminate Georgia's income tax — to see if it could help his business. His restaurant has hosted town hall meetings with community members to discuss the effort.

incometaxleadimage.png
Aerials of the GA state capitol in downtown Atlanta. CBS News Atlanta

"Off the bat, I'm all for, lowering taxes. Keeping more money that we work hard for in our own pocket," Bunch said.

He believes lower taxes could help him hire more staff, but he wonders how lawmakers would make up the more than $16 billion in annual revenue the income tax brings in.

"It's going to be a shortfall somewhere. So, we have to know where it is coming, the shortfall, going to come from," he said. He said he would not support the effort if it included increasing sales or property taxes.

State Sen. Blake Tillery, chairman of the committee studying the proposal, said the money wouldn't need to come from raising the sales tax. And because the state does not control property taxes, those wouldn't be affected either.

Tillery said part of the solution could come from cutting corporate tax breaks. "I've told folks before: $16.2 billion on the personal income tax, $30 billion that we bring in in corporate welfare and corporate subsidies, why would we not try to help everybody else in Georgia reduce those corporate subsidies and corporate welfare by just half?" he said.

Form 4868 automatic filing extension for federal income taxes. Income tax return filing deadline, delay and penalty concept.
Getty Images

Tillery argues that reducing these credits could help maintain funding for state services, including government operations and healthcare.

"If we get these $30 billion worth of credits under control, then we can reduce the income tax for everybody at the state capitol who didn't have a lobbyist," he said.

At Longstreet Café, some customers said families need financial relief. "I'm too old to worry about anything that bad, but I think anything to help will be good for the younger people, and it should be done right away," said 85-year-old customer Hazel Love.

Bunch said that in his community, every dollar matters — and he hopes lawmakers keep families in mind as they consider the proposal.

Tillery said momentum is growing for the plan because there has never been an effort focused specifically on eliminating corporate tax breaks. Proposals and legislation could be drafted as early as the end of the year, ahead of the next legislative session in January.

View CBS News In
CBS News App Open
Chrome Safari Continue