State Senate begins unlikely quest to ax income tax
Toward the end of last legislative session, there was increasing chatter about abolishing Georgia’s income tax. Lawmakers even formed a committee—the Senate Study Committee on Eliminating Georgia’s Income Tax—to explore ways of making it a reality. The idea is generating some excitement too. While achieving this lofty goal in the near-term will be challenging, it is a key priority for Senate power-brokers.
“Among southeast states,” Lt. Gov. Burt Jones said in a press release, “only South Carolina currently has a higher income tax rate than Georgia. If we wish to remain the number one state for business and keep our state competitive, we must expand on the progress made over the past four years to eliminate Georgia’s income tax.”
Sen. Blake Tillery, R-Vidalia, chairs the study committee and not-so-coincidentally is also the Senate Appropriations Committee chairman. “My role as chair will not be whether to do away with the state income tax, it’s to determine how we will do away with the state income tax,” Tillery exclaimed. Highly confident, he is already predicting that the General Assembly will repeal the state income tax in 2026, which sits around 5.19%.
There are plenty of justifications people cite in support of repealing the income tax. Some view it a punitive tax on earning a living, and it apparently can be a drag on the economy too. “Gross state product grew 13.77% faster in states without an income tax than it did in those with one over that period,” according to the Tax Foundation.
Georgians are right to be thrilled by the prospect of keeping 5% of their income, but if legislators are going to find a way to implement it, then they have their work cut out for them. According to the Georgia Budget and Policy Institute, estimates predicted that Georgia would collect a total of $36 billion in tax revenue in fiscal year 2025, but the income tax accounts for 52% of that, including $15.8 billion in personal income tax and $3 billion in corporate income tax.
Eliminating more than half of the state’s income creates a gaping hole that must be filled, as lawmakers fully understand. Sen. Ed Harbison, D-Columbus, is a member of the study committee, and he was clear that he’s open to the notion of killing the income tax so long as essential government functions continue to be properly funded.
Other states have figured this out, and there’s no reason that Georgia can’t as well. Nine states, including bordering Tennessee and Florida, have ditched their income tax, but they needed to find ways to continue funding government. So they were forced to rely on other forms of fees and taxation, like increased sales taxes.
Georgia’s stands at 4 percent, but Florida’s is 6 percent and Tennessee’s is 7 percent. In order to recoup lost income tax revenues via the sales tax, ours would need to be raised substantially. The Peach State’s sales tax currently represents less than a quarter of our revenue. Some back-of-envelope math suggests that our sales tax might need to be tripled to come close to replacing the income tax, although there are other ways of accomplishing this feat. Again, lawmakers can find a way to make an income tax repeal work, but 2026 may not be the year to do it.
This would represent a seismic change in Georgia policy, and many lawmakers are often averse to politically risky endeavors, especially with ever-important elections looming over 2026. I have yet to hear any members of leadership in the House of Representatives discussing the matter, which might indicate that they aren’t too keen on such a change just yet.
Beyond this, the state budget might incite political brawls next year. “In a memo sent last week by the state budget office, Director Richard Dunn advised agency heads that the Amended Fiscal Year 2026 and Fiscal Year 2027 budgets will likely not include any new spending increases,” reports Fox 5 News. “The memo makes it clear that if federal funding is reduced, the state does not plan to fill in the gaps—except for enrollment-based programs such as K-12 education and health care services.”
The memo stems from policies in Washington D.C. “Trump’s federal budget includes approximately $1.5 trillion in cuts aimed at offsetting the cost of a $4 trillion tax cut package,” Fox 5 continued. “Democrats have criticized the plan, arguing […] the spending reductions could significantly impact essential state-level programs.”
If the state’s finances are in question, then I doubt that the Legislature will be amenable to paradigm-shifting reforms to tax collection. Despite that, what once began as chatter around axing the income tax has since snowballed into a veritable movement under the Gold Dome. While it may not happen in 2026, it could become a reality in the coming years.