Georgia's $16 billion tax gamble

Overview

A Georgia Senate committee voted 6-3 along party lines to eliminate the state's income tax by 2032, starting with exempting the first $50,000 for individuals and $100,000 for couples in January 2027. The move would immediately blow a $3 billion hole in the state budget mid-fiscal year, eventually eliminating a $16 billion revenue stream that funds schools, healthcare, and infrastructure.

In This Story

3 Videos

8 People

Plan Dies in Republican Civil War

3 Context

Kansas Tax Experiment (2012-2017)

Key Indicators

$16B

Annual income tax revenue at stake

Total revenue stream that would be eliminated by 2032

$14.6B

State surplus reserves

Georgia's current cash reserves as of July 2025

67%

Georgians affected by first phase

Two-thirds of working Georgians would see initial tax elimination

$30B

Special-interest tax credits

Republicans propose trimming 10% to fund the cuts

5.09%

Current income tax rate

Reduced from 5.19% on January 1, 2026

Interactive

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Debate Arena

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People Involved

Burt Jones

Lieutenant Governor of Georgia (Running for governor in 2026 Republican primary)

Blake Tillery

Georgia State Senator, Chair of Appropriations Committee (Led the income tax elimination committee)

Nan Orrock

Georgia State Senator (D-Atlanta) (Vocal opponent of income tax elimination plan)

Jon Burns

Speaker of the Georgia House of Representatives (Advancing competing property tax cut proposal)

Brian Kemp

Governor of Georgia (Term-limited, serving final year; cool to full income tax elimination)

Chris Carr

Georgia Attorney General (Running for governor in 2026 Republican primary)

Brad Raffensperger

Georgia Secretary of State (Running for governor in 2026 Republican primary)

Danny Kanso

Senior Fiscal Analyst, Georgia Budget and Policy Institute (Leading policy critic of income tax elimination)

Organizations Involved

Georgia Senate Special Committee on Income Tax Elimination

Legislative Study Committee

Status: Completed recommendations, approved by 6-3 vote

Ad hoc committee formed by Lt. Gov. Burt Jones to study eliminating Georgia's income tax.

Georgia Budget and Policy Institute

Policy Research Organization

Status: Published analysis critical of income tax elimination

Nonpartisan research organization analyzing Georgia fiscal policy and budget priorities.

Timeline

Legislative Session Opens
Legislative

Georgia General Assembly convened for 40-day session running through April 2. Tax relief dominated opening day agenda as competing Senate-House visions entered active legislative phase.
January 13th, 2026
Burns Details Homestead Tax Plan
Statement

Speaker Burns clarified his competing vision: eliminate property taxes only on primary residences (homesteads), leaving rental properties taxable by local governments.
January 12th, 2026
Senate Committee Approves Elimination
Legislative

Special committee voted 6-3 along party lines to recommend phased income tax elimination by 2032.
January 8th, 2026
Burns Announces Competing Plan
Statement

House Speaker Jon Burns said House will focus on property tax cuts, not income tax elimination.
January 7th, 2026
Tax Rate Drops to 5.09%
Implementation

Scheduled 0.10% reduction took effect, continuing Kemp's incremental approach.
January 1st, 2026
Democrats Blast Elimination Plan
Statement

Sens. Nan Orrock and Ed Harbison issued statement calling proposal disastrous, benefiting wealthy at middle-class expense.
November 17th, 2025
Georgia Reports $14.6B Surplus
Budget

State fiscal year 2026 began with record reserves: $5.6B in rainy day fund, $9.1B undesignated.
October 2025
Raffensperger Enters Governor's Race
Campaign

Secretary of State Brad Raffensperger joined the race pledging to eliminate income tax, adding a third major candidate.
September 17th, 2025
Trump Endorses Jones
Political

President Trump endorsed Burt Jones for governor, boosting his insurgent campaign against establishment favorite Chris Carr.
August 2025
Jones Launches Governor Campaign
Campaign

Lt. Gov. Jones officially entered governor's race, pledging to eliminate state income tax, lending campaign $10 million.
July 8th, 2025
Jones Forms Special Committee
Legislative

Lt. Gov. Jones created Senate special committee to study income tax elimination, chaired by Sen. Blake Tillery.
July 2025
Kemp Accelerates Tax Rate Reduction
Legislative

Governor signed HB 111, reducing income tax rate from 5.39% to 5.19%, retroactive to January 2025.
April 15th, 2025
Chris Carr Enters Governor's Race
Campaign

Georgia Attorney General Chris Carr announced candidacy for governor, becoming early frontrunner.
November 2024
Burt Jones Elected Lieutenant Governor
Election

Jones won election after serving 10 years in the state Senate, gaining platform to advance tax agenda.
November 2022
Kemp Creates Flat Income Tax
Legislative

Gov. Brian Kemp signed HB 1437, eliminating Georgia's six income tax brackets and creating a flat 5.49% rate.
2022

Scenarios

Plan Dies in Republican Civil War

Discussed by: Implied by Georgia Recorder and AJC coverage of competing House-Senate priorities

House Speaker Jon Burns refuses to bring the Senate plan to a vote, instead passing property tax cuts. Jones uses the stalled proposal as a campaign rallying cry, but without legislative achievement to point to, his signature issue becomes aspirational rather than deliverable. Chris Carr benefits by positioning himself as the pragmatic candidate who can actually govern. The income tax remains at 5.09% with incremental reductions continuing under existing law.

Compromise: Partial Exemption Passes

Discussed by: Potential middle ground between House and Senate positions

Facing pressure from Jones's campaign and conservative base, Burns negotiates a compromise that exempts the first $50,000/$100,000 as the committee recommends but abandons the full elimination timeline. The partial cut takes effect in 2027, giving two-thirds of Georgians a significant tax break while preserving most income tax revenue. Jones claims victory and rides the achievement to the governor's mansion, but inherits the budget consequences of the cut he championed.

Full Elimination Triggers Budget Crisis

Discussed by: Georgia Budget and Policy Institute warnings echoed by Senate Democrats

Jones wins the governorship and uses Republican legislative majorities to ram through full elimination on his proposed timeline. The $14.6 billion surplus proves insufficient as economic headwinds reduce revenue and alternative financing falls short. By 2028, Georgia faces brutal cuts to education, rural hospitals close, and the state's credit rating is downgraded. The Kansas experiment repeats itself as Georgia becomes a cautionary tale, forcing an eventual tax increase that destroys Jones's political future.

Carr Wins, Shelves the Plan

Discussed by: Political observers watching the Republican primary dynamics

Chris Carr defeats Jones in the Republican primary by consolidating establishment support and appealing to voters worried about fiscal stability. Carr wins the general election and quietly shelves income tax elimination, continuing Kemp's incremental reduction approach instead. The special committee's recommendations gather dust as Georgia pursues targeted tax relief. Jones's political career stalls, and the brief window for radical tax reform closes.

Historical Context

Kansas Tax Experiment (2012-2017)

2012-2017

What Happened

Governor Sam Brownback slashed Kansas income taxes with a path to full elimination, promising economic growth would offset revenue loss. Instead, growth lagged the national average, revenues collapsed by hundreds of millions, and the state gutted spending on roads, bridges, and education. In 2017, the Republican-controlled legislature overrode Brownback's veto to reverse the cuts.

Outcome

Short Term

Budget crisis forced deep cuts to essential services and infrastructure

Long Term

Brownback's political career ended, and Kansas became the cautionary tale cited by opponents of income tax elimination nationwide

Why It's Relevant Today

Georgia Democrats explicitly invoke Kansas as proof that income tax elimination leads to fiscal disaster, while Republicans argue Georgia's $14.6 billion surplus prevents the same outcome.

Alaska Income Tax Repeal (1980)

1980-present

What Happened

Alaska became the only state in 45 years to fully eliminate its income tax, made possible by billions in oil revenue flooding state coffers. The state replaced income tax revenue with oil royalties and established the Alaska Permanent Fund, which pays dividends to residents.

Outcome

Short Term

Alaskans enjoyed income tax-free status while oil revenues funded government services

Long Term

Alaska's dependence on volatile oil revenue created boom-bust budget cycles, and recent oil price crashes have forced painful cuts despite the lack of income tax

Why It's Relevant Today

Proponents cite Alaska as proof income tax elimination can work, but critics note Georgia lacks Alaska's unique oil wealth to replace the revenue stream.

Mississippi Income Tax Phase-Out (2025)

2025-2040 (projected)

What Happened

Mississippi became the first state since Alaska to legislate income tax elimination, with Governor Tate Reeves signing a law to gradually reduce the 4% rate to 3% by 2030 and eventually eliminate it by 2040. The phase-out includes revenue growth benchmarks that trigger reductions, providing fiscal guardrails.

Outcome

Short Term

Law just enacted; initial rate reductions beginning with cautious triggers

Long Term

Full elimination won't occur for 15+ years, and revenue benchmarks may delay or prevent complete phase-out if growth falters

Why It's Relevant Today

Georgia Republicans point to Mississippi as the model for successful elimination, but Mississippi's 15-year timeline and built-in safeguards contrast sharply with Georgia's aggressive 6-year plan.