ATLANTA, GA — Gov. Nathan Deal on Tuesday announced plans for what supporters are calling one of the biggest income-tax cuts in Georgia history.
A newly reworked bill moving through the General Assembly with the governor’s blessing would double the standard deduction for all Georgia taxpayers and reduce the top income tax rate — which most Georgia workers pay — from 6 percent to 5.75 percent.
For a married couple filing jointly, the standard deduction would go from $3,000 to $6,000 under the plan. The tax-rate cut would go into effect Jan. 1, 2019 and would be cut again, to 5.5 percent, on Jan. 1 2020 if the legislature approves it.
According to Deal, the plan will save Georgia taxpayers roughly $5.5 billion over the next five years.
"These combined changes mark one of the biggest income tax cuts in state history, and does so in a fiscally responsible manner," Deal said Tuesday.
The tax savings in the bill are intended to offset what would have amounted to a $4.7 billion tax windfall over the next five years in Georgia based on changes to federal tax laws approved by Congress in December. Those changes limited or eliminated deductions that some Georgia taxpayers had used in the past.
The tax plan also would eliminate Georgia’s sales tax on jet fuel — a move backers say will encourage airlines to fly more direct flights to the state from around the world. Atlanta-based Delta and other airlines had been lobbying for the change while leaders in Clayton County, south of Atlanta, complained that the move would cost them millions of dollars a year in tax revenues.
Lawmakers had squabbled a bit about how to offset the federal tax changes this session before finally agreeing on the latest version of the bill, which appears likely to sail through both chambers of the legislature. Joining Deal on Wednesday was House Speaker David Ralston and Lt. Gov. Casey Cagle, who presides over the Senate and who is running to succeed Deal, who will complete his second term this year.
Photo courtesy office of Gov. Nathan Deal