Recently, Alabama and North Carolina lowered their top tax rate. Just this week, South Carolina’s state House just voted to lower its tax rate by at least half a percentage point, and its Senate has proposed going even further. Neighboring states Tennessee and Florida have no state income tax at all. Georgians live in a competitive neighborhood, and it isn’t getting any easier.
How would lowering taxes here affect job growth and help us keep up? Lowering and flattening Georgia’s personal income tax from its current top rate of 5.75% could create tens of thousands of jobs within five years.
A recent study by the Georgia Public Policy Foundation and the Beacon Hill Institute analyzes options for reducing Georgia’s top income tax rate and implementing a flat tax rate across all income groups. It also examines possible revenue offsets in each scenario as the income tax is lowered.
But, what would reduced taxes mean in terms of real numbers for economic growth in Georgia?
A reduction of the top income tax bracket in Georgia to 5% results in 21,134 jobs created in 2023.
Reducing the top income tax bracket in Georgia to 4% means 32,527 jobs created in 2023.
The impact of reducing the top income tax bracket in Georgia to 3% is even greater. The study projects that the result would be 43,693 jobs created in 2023.
Each scenario would also mean hundreds of millions of dollars in private investment and billions of dollars in increased disposable income and economic growth, The complete study can be found here.