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State Sen. Miller submits legislation to repeal state income tax
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Sen. Butch Miller, R-Gainesville. - photo by Nick Bowman

State Sen. Butch Miller, R-Gainesville, has proposed legislation that would repeal the state income tax. 

Miller, who is running for lieutenant governor in the 2022 election, said the proposal would help make Georgia competitive with neighboring states who don’t tax wages, such as Florida and Tennessee. 

The state’s current personal income tax rate is 5.75% after the General Assembly decreased it from 6% in 2018. Republicans had planned to decrease it another 0.4% in 2020 before the COVID-19 pandemic caused lawmakers to be more conservative about changing the tax code. 

Repealing income tax could also bring more people back to the workforce, Miller said, and a consumption tax system would broaden the tax base and make up for the lost revenue. The bill, currently prefiled for the January 2022 legislative session, does not specify any consumption or sales taxes. He said that models from other states show that the increase in business would also help compensate. 

“A consumption tax would broaden the tax base and have people pay based on what they’re consuming rather than what they’re earning,” he said.

Miller said the state currently brings in about $9 billion through income tax. 

Some are skeptical that repealing state income tax would be worth the price. 

Danny Kanso, a senior tax and budget policy analyst with the Georgia Budget and Policy Institute, wrote in an emailed statement that the state brought in closer to $14 billion — half the state’s budget — from personal and corporate income taxes in the current fiscal year. 

“Repealing the income tax would not only cause state revenues to plummet, but would also likely cause the state to violate its constitutional responsibilities to provide things like an adequate public education for all children,” Kanso wrote. “Wishful thinking and baseless projections of new employment and economic activity are not a strategy for raising revenue, and eliminating the income tax would leave Georgia … without a way to fund services and programs." 

Local Rep. Emory Dunahoo, R-Gillsville, has been trying to repeal state income tax for six years through his proposed “FairTax” legislation, which would similarly repeal income tax in favor of a consumption tax that Dunahoo claims would be “revenue neutral.” The consumption tax would get rid of tax exemptions and be like a “sales tax on steroids,” which could be 8-10%,  he said.

“Everybody pays … for everything they buy,” Dunahoo said of the FairTax system. “But you do away with all exemptions so that money comes back into the state budget.”

When asked about Miller’s new proposal, Dunahoo said he would like to see a more specific plan from Miller on how to compensate for lost revenue and that Miler hadn’t previously supported his FairTax legislation.

Dunahoo said he has not been able to get his FairTax legislation to the House floor for a vote in the past. 

Other Hall County representatives said they would support repealing state income tax. Rep. Timothy Barr, R-Lawrenceville, said he has been a longtime sponsor of Dunahoo’s FairTax legislation. “We need to stop taxing productivity here in Georgia,” Barr said. “It would definitely take hard work to get it done and ensure we retain a balanced budget, but I believe extensive research shows it can be done, and it would be a fairer tax system of taxation.”

Rep. Matt Dubnik, R-Gainesville, agreed saying that other states have abolished state income tax successfully. 

Miller said the policy was worth trying to implement while Georgia has a surplus in revenue. In September, the state reported a $2.2 billion surplus even after filling its rainy-day fund.