According to a pair of recently published reports by two different independent Washington D.C.- based think tanks, the state of Georgia taxes its working poor families at one of the highest rates in the nation.
A November report by the Center on Budget and Policy Priorities indicates that of the 42 states that have income taxes, Georgia places an abnormally high burden on single-parent families of three and two-parent families of four who earn annual incomes near or below the federal poverty line. The report’s authors Phil Oliff and Ashali Singham say that this policy taxes Georgia’s poor deeper into poverty.
A different report by the Institution on Taxation and Economic Policy criticizes the state’s leaders for “maintaining narrow income tax brackets” and “failing to index income tax provisions to inflation.”
The second report found that those making about $10,500 a year pay about twice as much of their income by percentage than those in the state’s top income group: individuals earning about $2.4 million per year.
State Rep. Matt Ramsey, who serves District 72 in Fayette County, said the recent reports oversimplified Georgia’s complex tax structure.
“It’s tough to compare states in tax structure,” Ramsey explained.
“By simply looking at the marginal income tax rates you’re singling out just one slice of a very large and complex pie. Georgia remains a top ten low tax state.”
Georgia begins collecting state income taxes on single parent families of three once earnings eclipse $12,700 annually, which is below the federal poverty line. This is the third lowest threshold in the country, behind only Alabama and Montana. By contrast, the same family would pay no state income tax in South Carolina until it earned $24,700. However, South Carolina has a state sales tax of 6 percent. Georgia’s base sales tax is only 4 percent.
South Carolina’s tax thresholds are pegged to inflation, while Georgia’s are not. In the Peach State, individuals who earn more than $7,000 annually pay the same 7 percent state income tax rate as those making $1 million.
“It’s true that the state tax brackets haven’t changed in many, many years,” Ramsey noted.
“There is talk every year of changing the tax code. I don’t think you’ll see any reform this year, but this stuff is constantly discussed in the legislature. Georgia does have refundable tax credits for some individuals and families making under $20,000 annually. The reports over simplify the situation.”
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