Georgia Tax Burden Lowest In Nation

This week’s Courier Herald column:

With Tuesday’s primary set to select partisan nominees or send candidates to two-person runoffs, it’s time to note that the Republican nomination for Governor is ending for some where it began. There remain emphatic pledges to eliminate Georgia’s income tax.

It’s easy to understand why these pledges are made. Voters who don’t understand the state’s budget simply believe they are taxed too much. The candidates themselves often ask rhetorical questions like “If Texas can do it, why can’t we?”.

Most voters won’t take the time to understand the differences of each state’s budget structure. They don’t have to. At the end of the day, state budgets must balance. The dollars can’t come out if they don’t come in.

The Tax Foundation keeps score of a variety of metrics on state governments. Their 2018 report shows the fallacy being sold by the candidates who are saying that the state is taking more than its share. Georgia is ranked as having the lowest state and local revenue per capita in the nation.

“Revenue” is defined as taxes, fees, licenses, and intergovernmental revenue. It’s the whole picture. And Georgia takes less than any other state.

Our neighbors Florida and Tennessee, as well as Texas are among the states that don’t have an income tax. Despite this, each takes in more state and local revenue per person than Georgia does.

This is important because if revenue is cut – and Georgia’s income tax represents roughly half the state’s revenue – then either services must be cut or taxes and fees must be raised elsewhere to make up the difference. The candidates making these pledges are also promising to increase spending, meaning that additional money has to come from somewhere.

If we want to be more like Texas, then we can raise property taxes. A lot.

According to the same report, the average Georgian pays .94% of the value of their owner-occupied house in property taxes each year. Texans pay 1.7%, which is not quite double.

Georgians don’t pay property taxes on groceries. Tennessee residents pay 5% tax every time they hit the checkout line.

Still miffed that Georgia raised its gas tax formula? Floridians pay a full ten cents per gallon more, and that’s on top of the vast network of toll roads throughout the state. You want to see Mickey Mouse? You’re going to pay more in gas taxes, and also pay tolls.

As Georgia’s economy has grown and tax revenues have recovered from the depths of the great recession, Georgia has reinvested about half of each year’s increased revenues in education, and used the other moneys to shore up transportation, public safety, and only twice in the past ten years given statewide employees a pay raise. The result is that last year Georgia was still spending less per person than we were prior to the recession when adjusting for inflation and population growth.

Most of the folks that say we can phase out the income tax believe they can do it by spending future surpluses. if they believe they can govern without sending local school districts additional money for their enrollment growth, or by not giving state employees cost of living raises when the unemployment rate is about 4%, I would welcome them to try.

Except I won’t. That’s what my vote is for. Anyone offering themselves for office promising this kind of shell game either doesn’t understand the budget or hopes you don’t.

I do.

I understand that the state is the fourth fastest growing state in the nation. I understand that the state has dug itself out of the worst recession since the great depression while completely rebuilding many of our economic engines and adding new ones. I understand that our schools are fully funded according to the QBE formula for the first time in decades, if ever. And I understand that all of this was accomplished while putting $2.5 Billion into the state’s rainy day fund to prepare for the next time we hit hard times.

To do all of that while maintaining the nation’s lowest per capita state and local revenue burden is nothing short of remarkable. The candidates choosing to run against this record of success chose poorly.

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MattMD_actualbethebalanceJMRLoyaltyIsMyHonorEllynn Recent comment authors
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davidmac
davidmac

Charlie,
I note that the table is from FY2015. Surely there’ve been changes since then to GA’s tax structure. Why does the Tax Foundation put out data that is 3-4 years old? Is there no better data to compare?

John Stoj
John Stoj

Thank you, thank you, thank you, Charlie.

Raleigh
Raleigh

Where do this come from? According to Tax Foundation’s latest report which was 2012 Georgia was rated 32nd well ahead of Tennessee at 47th and Texas at 46th. We are even ahead for Florida at 34th.

https://files.taxfoundation.org/legacy/docs/State-Local_Tax_Burden_FY2012.pdf

This sounds like another big sales push for another tax increase we do not need. The Whigs are definitely still in control of the Republican Party.

Ellynn
Ellynn

Example A, Savannah doesn’t want to raise their property taxes thus the city manager gets truly horrific idea to toll the Truman.

http://www.savannahnow.com/news/20180521/savannah-officials-suggest-tolls-could-pay-for-truman-parkway-maintenance

LoyaltyIsMyHonor
LoyaltyIsMyHonor

So this table is Pre-HB 170

Hmmmmmmmmm…..

JMR
JMR

If you’re getting this from the Tax Foundation’s 2018 Facts and Figures book – It clearly says in Table 2, on page 6, that Georgia ranks 32nd in the nation for state and local tax burden, not 50th. It’s misleading to equate total tax burden with state revenues per capita.

https://files.taxfoundation.org/20180411102900/Facts-Figures-2018-How-Does-Your-State-Compare.pdf

bethebalance
bethebalance

Per cap revenues and tax “burden” can be used and interpreted differently. Per cap revenues are arguably most easily affected by tax burden in combination with per cap income (wealth). With tax burden unchanging, more income means more revenue (at least for income taxes). There are other potentially confounding factors, like proportions of state revenues that move across interstate lines.
The truly nerdy may enjoy this:
https://taxfoundation.org/state-local-tax-burden-rankings-methodology/

MattMD_actual
MattMD_actual

Can someone tell me why there is such a recent increase in LOST’s? Why is Atlanta’s sales tax (combined) at 8.9% where Seattle’s is 9.6% in a State with no income tax? I know at least 1% was due to consecutive Atlanta mayors ignoring a basic part of infrastructure, i.e., the sewer/water system but then there are at least two taxes on transportation. Sure, Georgia ranks well for business but that should not be our only consideration. Georgia ranks fairly poor in health care access and ranks middling in education. I don’t think we need to whore ourselves out to… Read more »