ATLANTA — Eliminating the state income tax sounds great to many voters, but Republicans support the move. in several states Questions continue to arise about whether such large tax cuts can be achieved without raising other taxes or sharply cutting government funding for education, health care and other services.
Georgia on Wednesday became the latest state to apply to repeal its personal income tax. Senate Republican leaders supported a proposal to reset it by 2032. Personal income taxes are projected to raise about $16.5 billion this year, or 44% of the state's total revenue.
This push is driven by politics. Lieutenant Governor Bert JonesThe Republican who leads the state Senate has made repealing the income tax a centerpiece of his 2026 campaign for governor. State Senator. Blake TilleryThe Vidalia Republican, who chaired the committee to repeal the tax, is among the candidates to succeed Jones as lieutenant governor.
“This is the first vote we're going to take on affordability,” Tillery said.
But it is unclear whether this proposal will be accepted. Georgia House Republicans may want to continue to take away the tax in smaller increments, preferring a “measured” approach. Republican House Speaker John Burns of Newington said Wednesday his main goal for 2026 is to eliminate property taxes for homeowners, but said he was willing to consider the Senate plan.
Republican Governor Brian Kempserving his final year, was lukewarm about completely abolishing the income tax. He declined to comment Wednesday on the Senate plan, but his spokesman, Carter Chapman, said Kemp wants to “continue cutting taxes and putting more money in the pockets of Georgians, as he has done throughout his term.”
The state's Democratic minority opposes the move, saying it would mainly benefit high-income people and the state needs the money to provide services.
Iowa, Kentucky, Mississippi and Missouri have committed to eliminating personal income taxes, joining eight other states that do not tax personal income. Eight other states besides Georgia are cutting personal income tax rates this year, according to the Tax Foundation, a Washington, D.C.-based group that is generally skeptical of tax increases.
“We've seen many states cut income tax rates over the last four or five years, especially during the COVID-19 pandemic and recovery,” said Aravind Boddupalli, senior fellow at the Urban-Brookings Tax Policy Center in Washington, D.C.
Supporters say the cuts help the state compete for new residents and businesses, pointing to growth in Texas and Floridatwo states without personal income taxes.
“Your income tax is a tax on productivity,” said Manish Bhatt, who studies state taxes for the Tax Foundation. “If you tax productivity, you potentially lose economic benefit.”
Georgia has already reduces income taxtaking the once top income tax rate of 6% and reducing it to a flat rate of 5.19%. Republicans generally support further tax cuts for individual and corporate taxpayers to 4.99% this year, an estimated $800 million in lost tax revenue.
The Senate plan would then freeze the corporate rate and focus on individual tax cuts. In 2027, he proposes to exempt the first $50,000 of income for a single person or $100,000 for a married couple, up from $12,000 and $24,000 now.
Facing criticism from Democrats over availabilityBut the big increase in tax-free income is central to Republicans' own arguments about how they can make the money stretch further. About 70% of Georgians reported taxable income of less than $100,000 in 2024, according to government data.
“This is a plan that prioritizes benefits for hardworking families,” Tillery said.
The initial rate cut, as well as the tax waiver proposal, would reduce Georgia's revenue by $3.8 billion in the 2027 budget year. Tillery says the state could pay by using excess tax revenue and returning to paying for capital costs through borrowing instead of cash. But those steps likely won't cover lost revenue even in the first year, let alone an additional $13 billion in cuts to get to zero.
Tillery said revenues should be increased by cutting business income and sales tax breaks, saying lawmakers should cut “corporate welfare.” But legislators And Kemp in recent years there has been opposition to rolling back these measures.
Tax cuts have not always been a political boon. In Kansas, after Republicans under Gov. Sam Brownback sharply cut income taxes more than a decade ago, voters resented budget cuts and lawmakers enacted multiple tax hikes to cover persistent budget shortfalls, including restoring some income tax cuts. Democratic Governor Laura Kelly won her first term in 2018 presenting the race as Brownback policy referendum.
“State income taxes are only bad if you fundamentally don’t believe that the services and public investments that state governments provide are worth anything,” said Matt Gardner, a senior fellow at the left-leaning Institute on Taxation and Economic Policy.
In MissouriRepublican Gov. Mike Kehoe and GOP legislative leaders have made phasing out the state income tax a top priority for the session starting Wednesday. They are seeking to extend sales taxes to services that are not currently taxed to make up for lost revenue.
“We want to do this in a smart and efficient way to prevent the state from falling off some sort of fiscal cliff,” Missouri House Majority Leader Alex Riley told The Associated Press on Tuesday.
But increasing sales taxes could hit poor taxpayers harder. If Georgia doesn't increase its sales tax, the liberal-leaning Georgia Budget and Policy Institute estimates that the combined state and local sales tax rate will have to rise sharply from the current 7.42% to offset revenue losses.
All of this leads to questions about plans to repeal the income tax, even from Republicans. Burns, the speaker of the Georgia House of Representatives, said he is “open” to any plan that would benefit Georgians.
“But we need the details, and this should work,” Burns said. “We need to make sure that we can continue to provide vital services – health care, public safety, education and all the things we've talked about.”
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Associated Press writer David Lieb contributed from Jefferson City, Missouri.
