OpEd Column: Georgia’s push to zero: Can the state eliminate its income tax?

Published 8:30 am Wednesday, July 30, 2025

On July 17, Lt. Gov. Burt Jones announced the creation of the Georgia Senate Committee on Eliminating Georgia’s Income Tax. The members’ task: figuring out how the state moves from our current income tax rate of 5.19% to zero.

The high-profile effort, which consists of 11 state senators, mostly committee chairmen and members of leadership, is undoubtedly stacked. Three members (and potentially more) have already begun their campaign for lieutenant governor in 2026, and Lt. Gov. Jones officially announced his run for governor in early July.

Besides being good politics — after all, what voter enjoys paying taxes? — lowering the income tax rate significantly is becoming an increasingly imperative policy.

While Tennessee and Florida have long been held up as the gold standard in the Southeast for their lack of a state income tax, it’s what our other neighbors have been doing lately that has state legislators considering how to aggressively lower Georgia’s income tax rate.

On one hand, the past three years have already been a positive for Georgia taxpayers. In 2022, the state adopted a flat tax of 5.49%, which was scheduled to take effect in 2024. That was a substantial change from the previous structure of six brackets that topped out at 5.75%. However, before those tax bills ever came due, Gov. Brian Kemp and state legislators proactively lowered the rate to 5.39%.

This year’s legislative session resulted in the rate dropping even lower to 5.19%, retroactive to Jan. 1, 2025. Thanks to financial “triggers” put in these legislative packages, the income tax rate can potentially be lowered further to 4.99% if the state maintains its economic growth.

Entering this year, nine states did not have state income taxes on wages and salaries. This includes the aforementioned Tennessee and Florida, along with our fellow SEC state of Texas.

Now that most of our neighboring states have concluded their legislative business for the year (with the exception of North Carolina), we can assess the current competitive landscape heading into 2026.

Mississippi took steps earlier this year to become the tenth state without an income tax. Lawmakers there passed a bill which lowers their state’s current 4.4% rate to 3% by 2030, with a statutory plan to reach 0% by 2040.

The Carolinas have been busy on this front as well.

North Carolina, which currently has a flat 4.5% rate, will drop to 3.99% in 2026 and is scheduled to reach 2.49% by 2029. The budget proposed by the North Carolina Senate could see the income tax rate drop as low as 1.99% by 2031 if certain revenue conditions are met.

In South Carolina, legislation passed in the House which would see that state’s 6.2% top rate become a 1.99% flat tax over the next five years. This would then be followed by eliminating their state’s income tax over the subsequent five years. The South Carolina Senate did not take up this bill, but it remains alive heading into 2026.

Alabama remains an outlier in retaining tax brackets on income — with a top rate of 5% — as states began to shift in recent years to a flat tax rate. This includes Louisiana, which instituted a 3% flat tax rate in 2025.

Yet, even amid all of this cutting, fiscal responsibility remains paramount in a state like Georgia, which requires a balanced budget, as do 48 other states. Tax revenues lost must be accounted for, whether through economic growth or by cutting government services.

This will also be part of the mandate for the Georgia Senate Committee: to determine the “pay-fors” that could offset eliminating the income tax, such as raising the sales tax or reducing existing state tax credits.

One idea to account for reducing the tax rate in a measured manner is a concept known as the Taxpayers Relief Fund. A bill introduced late in the 2025 session by House Ways and Means Chairman Shaw Blackmon, R-Bonaire, would dedicate surplus revenues to help lower the tax rate while ensuring that the state’s budget is not placed in a precarious position.

Ultimately, a state’s tax burden on its citizens consists of more than just income taxes. Corporate taxes, sales taxes and property taxes are all elements of economic competitiveness. According to the Tax Foundation’s 2025 State Tax Competitiveness Index, Georgia fares better in this regard than South Carolina, Alabama and Missippippi, although it is not in the same tier as Florida, Tennessee and even North Carolina.

Which brings us back to the focus on eliminating the state income tax. Imagine, for example, trying to recruit workforce talent in a border city. This likely includes attempting to explain a lengthy qualifier about your relatively light overall tax burden when your neighboring state doesn’t have an income tax at all.

The math might add up, but it takes a lot longer to get the message across. Plus, a lower rate looks a heck of a lot better on a bumper sticker in 2026.

Chris Denson is the Director of Policy and Research at the Georgia Public Policy Foundation (www.georgiapolicy.org).