House Ways and Means Tax Reform Subcommittee
Wednesday, February 22, 2017
Testimony of Kelly McCutchen, President, Georgia Public Policy Foundation
I would like to focus on four positive aspects of HB 329.
One suggestion would be to consider a Georgia-specific tax credit, as was contemplated by the Special Council on Tax Reform and Fairness For Georgians, instead of linking to the federal Earned Income Tax Credit (EITC). There have been discussions about increasing the federal EITC for childless adults, which would result in an unexpected cost to Georgia. Georgia could address that issue now with a customized tax credit.
Finally, most of the tax changes over the past few years in Georgia have focused on corporations. It’s important to recognize that more than half of all business income nationally is taxed through the individual income tax, not the corporate income tax. That’s because more than nine out of 10 businesses are organized as “pass-throughs” – Partnerships, Sole Proprietorships or S Corporations.
That is true on the state level as well, which means there are more than 800,000 small businesses in Georgia that would benefit from this tax reform.