Friday, April 23, 2010

Pending Georgia Tax Changes Would Redistribute Income from the Poorest Families to the Rich

That's what the Institute on Taxation and Economic Policy says & I agree with them.

Instead of helping Low-Income Families, they are hurting them even more.

In the 2010 legislative session, Georgia lawmakers have ratified, or are poised to ratify, a set of tax changes which would dramatically reshape the fairness of the state’s tax system. A new ITEP analysis shows that these changes would increase the taxes paid by the poorest ninety five percent of Georgians, while cutting taxes for the best-off five percent. The analysis also shows that the current tax system actually redistributes income from below-poverty families to the best-off Georgians—and that likely 2010 tax changes would worsen this inequity.

The Georgia tax system is regressive, requiring low-income families to pay more of their income in state and local taxes than upper-income families must pay. A new ITEP analysis of nonelderly and elderly Georgians shows that in 2009, that the poorest Georgia families pay an average of 11.4 percent of their income in Georgia taxes, twice as high as the 5.7 percent of income that the very best-off 1 percent of Georgians must pay. 1 This upside-down pattern is common in state tax systems—but Georgia’s tax system is somewhat more regressive than the typical state. ITEP’s 2009 report, Who Pays, ranked Georgia as the nineteenth most regressive tax system in the nation. Among the main factors making Georgia’s tax system unusually regressive are its relatively flat state income tax structure, its reliance on sales taxes, and the
lack of a substantial refundable low-income tax credit such as an Earned Income Tax Credit.

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