Democrats: Overhaul bill would raise income taxes for those who earn $20k to $180k

Updated at 5:07 p.m.: The joint House-Senate committee sent HB 387, a tax overhaul bill that expands the reach of the sales tax and cuts the personal income tax rate, to the House for the first of two all-or-nothing votes.

The House is to vote on the matter Wednesday. The Senate could vote as early as Friday.

Original: My AJC colleague Chris Joyner just scored some Democratic number-crunching on the impact of HB 387, the tax overhaul bill that would trade increased sales taxes for a 25 percent reduction in the personal income tax rate.

Despite that reduction, because deductions would be capped, 1.2 million individuals and couples in Georgia who earn between $20,000 and $180,000 a year – and file itemized deductions — would pay anywhere from $44 to $419 a year more in income taxes, according to figures provided to the party by the Georgia State University Fiscal Research Center.

Income brackets above $180,000 would pay fewer taxes, with $1,000-plus benefits to those earning above $300,000.

See the spreadsheet here.

All Georgians who do not itemize their annual personal income tax returns would pay less.

We understand that Republicans in the Capitol have been running their own numbers, but so far they have not shared them.

The Democratic figures do not take into account other aspects of HB 387, including lower taxes on cable TV, a new sales tax on satellite TV, and a sales tax on car repairs.

The numbers were received just as a second meeting of the House-Senate tax committee began Tuesday afternoon.

House Majority Leader Larry O’Neal, R-Bonaire, a tax accountant, disputed the Democratic figures when they were brought up by state Sen. Steve Thompson, D-Powder Springs.

- By Jim Galloway, Political Insider

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61 comments Add your comment

Centrist

March 29th, 2011
4:59 pm

“My AJC colleague Chris Joyner just scored some Democratic number-crunching on the impact of HB 387″

A Democrat scoring Democrat numbers. The only surprise in the result is that it was not worse.

Centrist

March 29th, 2011
5:06 pm

The current legislative session appears to be reneging on the phase-out of taxing pensions, and keeping only the current $35K exemption. Not only is this a break of faith for those of us who decided to retire in Georgia instead of a neighboring state that exempts such taxes, it will turn out to be a revenue loss as economic retirement decisions are made.

As you probably know, losing pensioners to other states results in the loss of their typically larger discretionary spending which create jobs and sales tax revenue. Such pensioners are generally more law abiding than other population segments, and they pay property taxes. They also don’t normally use state services and infrastructure nearly as much as commuting working families with children.

Republican representatives generally make tax decisions based on dynamic studies instead of the typical static studies Democrats make ignoring reactive backlash behavior. What happened this year?

You can find your local Georgia state representatives and their email addresses by typing in your zip code + 4 in the top box here: http://www.votesmart.org/official_state.php?state_id=GA&dist=&go2.x=5&go2.y=8

Last Man Standing

March 29th, 2011
5:06 pm

I believe that I would doubt both democrat and republican figures at this juncture. “All liars will figure” in their own best interest.

GaBlue

March 29th, 2011
5:18 pm

Told ya. I don’t need to read the bill to know whose going to (yet again) bear more of the tax burden in this state (while getting less and less for my money): I am. Middle class, not poor enough for exemptions, and not rich enough for the loopholes. Every year I work more for less purchasing power. Every year I put money in my 401K, and yet, its worth is what it was years ago. Every year I perform upkeep and maintenance on my house, the value of which is sliding, even in a “stable” neighborhood. The bills go up, and the pay does not. Oh yeah, college is going to cost more now too, even though it already costs more than ten times what it did when I went. Darn, what a stupid dip*bleep* I was to believe in the protestant work ethic and the “American dream.” What a joke. At least I can sleep at night knowing that none of the corporate-sponsored, talibaptist crooks under the gold dome got there on my vote.

Keith

March 29th, 2011
5:20 pm

Road Scholar

March 29th, 2011
5:35 pm

Boy, am I surprised!

Sideshow Bill

March 29th, 2011
5:43 pm

But lowering taxes on the rich and raising it on the middle class benefits all of us, trickle down works, no really. /snark

atlmom

March 29th, 2011
6:02 pm

One thing I read was that it would cap deductions at something like $17k. Crazy. I pay almost $10k in property taxes, and I suspect that many pay much more, as I have lived in my house for quite a while. So, um, this is another tax on the people who live in the city and pay high property taxes. The people who pay for the rest of the state.
Why would there be a cap on deductions anyway? What sense does that make? So I get to pay taxes on money that has paid taxes. Great. Way to go.
I’m not fond of the dems for doing what they do year in and year out, but the ideas by both sides these days are awful.
And MA has lower income *and* property taxes than here. And, um, better schools…by the way…

the original and still the best John Galt

March 29th, 2011
6:08 pm

Any Legislator who votes for this mess should be facing stiff opposition next time around. I’m afraid, however, based on the evidence so far that the average Georgia voter is asleep.

HL

March 29th, 2011
6:11 pm

But Atlmom, MA is the liberal state. Of course their divorce rate is lower and their schools are better so I no longer know what that means. A friend called them taxachusetts and I mentioned that he should look at the taxes we pay compared to MA.

LizCarter

March 29th, 2011
6:11 pm

Ugh, Okay Republican leaders… release the numbers and show us how this bill reduces our taxes or is an even trade to move to a less complex tax system for Georgia. If it’s a tax increase on the middle class, I’d strongly suggest you vote NO. We did not elect you to do what is easy, please do what is RIGHT.

HL

March 29th, 2011
6:13 pm

I don’t know why they wouldn’t just do a flat tax with a small deduction for all people. Oh yeah, then the wealthy would have to pay the same.

HL

March 29th, 2011
6:24 pm

Next up on the agenda is creating jobs, right? GA is a right to work state and that alone was to be a job creator. It’s a shame that our unemployment numbers don’t reflect that. As recent studies have shown, corporations look for an educated workforce among other things.

jconservative

March 29th, 2011
6:55 pm

Nationally Republicans have been raising taxes for 30 years. Why would I be surprised they would raise taxes in Georgia.

I keep asking, why are we messing around with taxes. Why not just cut spending?

atlmom

March 29th, 2011
6:59 pm

HL: we were SHOCKED when we were looking at a job there and started poking around, and voila! what??? I mean, wow, you could have blown me over with a feather. Cause I saw: hey, income tax is lower – so property taxes must be higher, right? Then, they’re not. And the schools are good and the crime is lower. And we’re talking about Boston. So…wow. I really love GA (am not from here), but it’s getting a little crazy when we start to look at other states/cities about standards of living and all that such. We’re wondering what’s keeping us here.

say what?

March 29th, 2011
6:59 pm

More taxes for the tax burdened middle class. without a middle class society dies, and these politicians are making sure society dies in the next 50 years, so don”t worry about your having money for retirement.

mark

March 29th, 2011
7:02 pm

who voted for these clowns? I bet 80% will be re-elected by you voters. Trickle down economics has been in place since 1980 with Reagan. Since then, the rich have gotten richer and the poor have gotten poor. The middle class has gotten smaller. Vote Republican and this is what you get! Anti middle class, Anti- public education, Anti- freedoms.

GaBlue

March 29th, 2011
7:17 pm

The reason they are able to do this is because the people most adversely affected are (a) not paying attention to what their representatives actually do, and (b) willing to substitute rhetoric, slogans, divisiveness, and the fat finger of “blame the other guy” for facts and ACCOUNTABILITY.

Hint: When you hire people to run the government who hate government and believe government is BAD, then you’re hiring someone who intends to prove it. Don’t be surprised when they do. Hollering “Just cut spending!” is the LAZIEST approach I’ve ever heard!!! Programs need to be cut where they are wasteful. Making them run more efficiently and achieve the goals they were created to achieve takes WORK. Something worth having is worth working for, but somehow the “conservatives” in this state have waived that requirement for our legislators and state government leaders, and accept a spending cut as evidence of a day’s work. It isn’t, and it doesn’t mean a darn thing if the goverment is handling its business as it should.

TrishaDishaWarEagle

March 29th, 2011
7:22 pm

@GaBlue..

‘Programs need to be cut where they are wasteful. Making them run more efficiently and achieve the goals they were created to achieve takes WORK”

Most of the goals these programs were created to achieve are not legitimate functions of government. We are NOT each other’s freaking keepers..

Notice of Income Tax Increase

March 29th, 2011
8:08 pm

NOTICE OF INCOME TAX INCREASE
Notice of income tax increase for middle-class taxpayers that itemize…

Summary: The tax code changes proposed in the Georgia General Assembly will raise income taxes for taxpayers that itemize above $17,000 in total deductions. If you’re middle-class, itemize, and have a mortgage above $250,000 and/or are generous with your church/charity of your choice, it looks like you will have an income tax increase. Benefits will accrue to those at the very top and very bottom of the income scale.

That’s the bottom line… when you cut through the rhetoric, the middle-class largely pays more and the very top and very bottom collect the benefits… Don’t forget about the new satellite TV service tax that will impact middle-class tax payers in addition to the proposed net income tax hike.

If you’re opposed to this middle-class tax hike, let your state legislator know…

gatorman770

March 29th, 2011
8:31 pm

Notice no added tax on a round of golf for the Georgia legislators, so the car dealers and other businessman that benefit from the tax increases can pay them back year round!

SOU. GA . IRISH

March 29th, 2011
8:31 pm

Enter your comments here

khc

March 29th, 2011
8:32 pm

mccuthen proves he is on the take….he probably is in top 3% which will get tax cut…repubs pulling wool over middle america again and in GA most are not bright enough to see it…anyone trust larry oneal….the guy who got sonny h9s tax break

RX350

March 29th, 2011
9:13 pm

Someone who earns $300,000+ getting an income tax reduction while everyone under $180,000 pays more seems fundamentally wrong. Are we sure these are Republicans running the show?

I would complain to my state representative (Brooks Coleman) and state senator (David Shafer) but I contacted both on a different issue weeks ago and neither one did me the courtesy of a response.

Centrist

March 29th, 2011
9:17 pm

I’ve got to admit this patchwork “reform” bill sounds like a lobbyist gift-fest, and a middle class tax increase. It may need to die. Standing by for Republican number explanations, but as stated above – they will have their own spin.

Sarah

March 29th, 2011
9:18 pm

Everyone here sees it and they are going to feel it for years to come. You just have to make your elected officials “feel it” by withholding your support and or vote. Just wait until they tax services and food, as they plan to do (just not this yet, that would look really bad, and hard to swallow in one year). The info just got released last night. Tell your friends!

BlahBlahBlah

March 29th, 2011
9:26 pm

Pensions should be taxed as income, because that’s what it is. It’s income. Don’t like it? Sell your house and move!

Brenda

March 29th, 2011
9:34 pm

All of a sudden, Democrats are worried about increased taxes? You have to be kidding me. Their solution to EVERYTHING is more taxes.

If Jim wants credibility he is going to have to go somewhere besides the democrats.

td

March 29th, 2011
9:35 pm

BlahBlahBlah

March 29th, 2011
9:26 pm
Pensions should be taxed as income, because that’s what it is. It’s income. Don’t like it? Sell your house and move!

I am pretty sure my pension is taken after taxes but I am not sure about my employers contribution.

Neil

March 29th, 2011
9:35 pm

What tax plan would Democrats EVER be in favor of, unless that plan lowers taxes on those making under $200K to nothing, while taking 100% from those making more than $200K? Democrats will ALWAYS cry foul on any plan that attempts to make the system more fair and reduces the burden on those paying the most taxes. People in the higher wage brackets will still pay a HUGE amount of taxes and people at the lower end will continue to pay little to nothing. At least with sales and consumption taxes, you can choose what, where, and when you buy, and everyone shares the burden.

td

March 29th, 2011
9:49 pm

Neil

March 29th, 2011
9:35 pm

Very true statement. I do smell a little party line flavor and disingenuous language is some of these posts.

Centrist

March 29th, 2011
9:56 pm

Social Security (FICA) payments into the system have ALREADY been taxed. Now both the Feds and Georgia are taxing it AGAIN.

BeenThereDoneThat

March 29th, 2011
10:06 pm

Can someone explain how taxing individual car sales now is legal where it was ruled illegal when Zell Miller tried it when he was in office? That was a nightmare to the MVD and DOR responsible for collecting the tax then and a bigger nightmare when they had to issue refunds when the Court ruled the collection of sales tax to and from non-business entities unconstitutional.

No more

March 29th, 2011
10:27 pm

more taxes instead of cutting government fat, waste and fraud in contracts, salaries and obscene pensions for government workers. Slash the waste and cut taxes!

Neil

March 29th, 2011
10:35 pm

@td (March 29th, 2011 9:49 pm). I’m a libertarian (philosophy not party) so there is no party bias, but I do acknowledge I have no love for the usual Democrat’s views on things. So my comments are somewhat tongue-in-cheek, but also based on what I think is reality. Democrats want their constituency to pay nothing, while soaking those they presume to be a lost cause for them politically, the higher income demographic.

When we discuss tax reform in any flavor, whether state or federal, to me there are two parts to it. The first is does everyone share the burden in some manner? Not necessarily in absolute dollar value, but does everyone pay something? A flat income tax is much more fair, yet Democrats demand so-called progessive taxation that punishes people for earning more. Likewise, sales and consumption taxes generally tax us all more equally, and tourists and others share our burden.

Georgia doesn’t need a tax systems like we have at the federal level, reliant on income taxes, where nearly 50% pay nothing, a percentage pays little, and a small percentage of upper income folks pay the lion’s share of income taxes and shoulder the burden for everyone.

Hamilton

March 29th, 2011
10:52 pm

Why bother Ga’s taxes at all. It’s a contrived issue. We have the lowest taxes per capita of just about anybody. It is currently so SIMPLe. Nothing hidden. Just plug in the federal numbers and calculate. The powerlators, er legislators want to further hide their goals.
I for one would rather have a tax that’s called a tax than be literally nickeled and dimmed to death with “fees” and “surcharges” on everything. Where’s the courage?

Last Man Standing

March 29th, 2011
10:57 pm

BlahBlahBlah:

“Pensions should be taxed as income, because that’s what it is. It’s income. Don’t like it? Sell your house and move!”

Many people relocate after retiring, and they look for places that will maximize their retirement dollars. Neither FL nor TN have state income taxes and they have grown in population at nearly twice the rate GA has. Retirees aren’t predisposed to criminal acts normally, use less of the state’s infrastructure and have more disposable income than the everage working family. Do you really want to discourage these people from moving to GA? I think not.

GaBlue

March 29th, 2011
11:07 pm

Tax the churches, balance the budget. They utilize infrastructure, roads, clean water, policemen, firemen, and schools. The ability of their flocks to fork over 10% is also directly related to the availability of these services and a thriving local economy. They are businesses (*gasp* operating on Sundays, no less!) and many of them heavily into lobbying and influencing our government for their causes. PAY UP, Deadbeats! I can’t carry the burden for y’all AND the rich folks who stash their cash in overseas investments. Geebus.

outsider

March 29th, 2011
11:07 pm

People keep talking about these figures as if the Democrats came up with them. These numbers came from the same group at Georgia State that were asked to show that the tax changes are revenue neutral. All the Democrats did was bring the figures to the light of day. I ran through the numbers, as best I could, and I would end up paying roughly $500 more per year under this plan. (My income would be considered upper middle class.) Why should I pay more to give some special interests a big tax break?

[...] The vote on the tax reform proposal, should it happen, will come in the House tomorrow.  Details on the actual proposal are here, with a few comments by Jim Galloway here. [...]

td

March 29th, 2011
11:21 pm

outsider

March 29th, 2011
11:07 pm

I do not see a age reference on these numbers? I would be willing to bet that if you take out the breaks of the seniors with good pensions, SS and investments with no mortgage then it would be revenue neutral for all classes.

Those pesky seniors now and the baby boomers that are about to retire come out in mass and vote. I bet they are getting their tax break.

td

March 29th, 2011
11:27 pm

GaBlue

March 29th, 2011
11:07 pm
Tax the churches,

So what you are really saying is that we should be taxing all gifts because the ones receiving salaries in the church has to pay all the same taxes as we do. How about the money you give to your children. Should that be taxed? Should the monies you give to charity be taxed? Should all of these 501(c)’s (I think that is the tax free ones) be taxed? You know the NAACP, NOW, AAARP, Planned parenthood (they are not only tax exempt but also get federal money)? How about all the foundations?

Karl Marx

March 29th, 2011
11:28 pm

Neil first “Tourist” don’t usually get their car repaired in Georgia, or pay their cell phone bill here, or pay for Satellite TV. This consumption tax will not be paid by “Tourist” it will be paid by those that live here. You heard from an auto mechanic tonight that said the additional charges will be passed on to the consumer AND that my friend blows a hole in your stupid theory that 50% pay no taxes. Reagan made the point years ago that half the cost of a loaf of bread was embedded taxes and he was right. That means percentage wise the poor and middle class pay a larger percentage of their income to taxes than anyone else. This is a tax increase. A big one.

td

March 29th, 2011
11:32 pm

Neil

March 29th, 2011
10:35 pm

Again, I do not disagree with you. Every person should have a equal % in the game. With this move everyone would be looking at the services offered and asking “is this something the government should be involved in”.

td

March 29th, 2011
11:39 pm

Karl Marx

March 29th, 2011
11:28 pm

“theory that 50% pay no taxes”

With EITC and deductions 47% pay no INCOME taxes.

” Reagan made the point years ago that half the cost of a loaf of bread was embedded taxes and he was right. That means percentage wise the poor and middle class pay a larger percentage of their income to taxes than anyone else.”

You just made a great argument to do away with all corporate taxes (since they do not pay them). This move would be the biggest tax cut to the poor in the history of the nation.

WAW

March 29th, 2011
11:46 pm

The whole sorry bunch of slaves to their rich owners can go to blazes. The conservative, republican, Chamber of Commerce boot licking ditto-heads lied and continue to lie to you ignorant right winger / tea party old farts who are voting away your state and country. Have you added 2+2 and got five yet? You ain’t going to either! Keep voting for them and if they haven’t screwed you yet, your time is coming.

Neil

March 29th, 2011
11:53 pm

@ Karl Marx, while I can probably acknowledge your point about tourists, you are absolutely wrong about federal income taxes. It is established FACT…not in dispute….that nearly 50% of wage earners pay NO federal income tax. Many also get refunded credits. Look it up…CNN, MSNBC, and other sources accepted by the left. You can have a difference of opinion, but you cannot substitute your own facts for the actual ones.

Deb

March 29th, 2011
11:53 pm

For all the complainers who voted for these pigs, but look around the gays are no where to be seen! Back in the closet wher they belong. Gay marriage? Hell no and I bet the repigs are looking at creating the gay death bill like Uganda tried to pass. Abortion is almost a crime punishable by death! Hell, miscarriage too! Get those stupid women folks pregnant and cookin’ like they belong. Another year or two women will not be owning property but will BE the property! Hey there a new tax on the sale of women. Snark.

I hope you all get hosed that voted repig. You did this.

ANGRY AS HELL

March 30th, 2011
12:05 am

td just reminded us of Ronald Reagan’s analytical approach to explaining what goes into the cost of a loaf of bread — an analysis brought to us by a President who saw virtue in ‘trickle down economics.” The only thing that’s been trickling down has been the tax percentages the rich no longer pay, but the middle class now has to assume, in addition to what it’s been paying. Who says having a lot of money is a burden???? For that income group ($20K to $180K) who voted for those no-tax Republicans, you’re getting exactly what you deserve.