This week, Georgia Governor Brian Kemp officially signed House Bill 463 into law, which cuts the state income tax rate under 5 percent this year and lowers it further in the future. The rate cut, coupled with the changes to various deductions, will keep money in the pockets of hard-working Georgians at a time when the costs of food and energy continue to rise. Governor Kemp explained that tax relief for Georgians was a priority in his state of the state address, and HB 463 delivers the relief that Georgians were promised. Most importantly, the new tax law builds on the progress Governor Kemp and leaders in the General Assembly made cutting taxes in recent years.
Income taxes distort the free market, raise costs for workers and business owners alike, and contribute to bloated government. Reducing tax rates is crucial for keeping the size of government under control and limiting effects for individual workers. A complicated tax code can contribute to the government picking winners and losers, which is antithetical to a free enterprise system.
The negative effects of higher corporate and personal income taxes are deeper and more pernicious than just the money they take out of the economy. These taxes stifle innovation and, in some cases, may drive entrepreneurs out of state. Academic research has shown that personal and corporate income taxes have significant negative effects on innovation in the state, leading to fewer patents issued and fewer inventors living in the state. By cutting the rate this year and setting the stage for future cuts down to 3.99 percent, Georgia will have one of the lowest flat tax rates in the country, setting up Georgia’s economy to grow for years to come. Lower income tax rates will make Georgia an even more favorable location for businesses to thrive and a destination for the workers businesses will need.
These new tax rates put money back in the pockets of workers, strengthen independent businesses, and support a free-market economy where productivity and initiative are rewarded — not taxed. HB 463 is a win for families, employers, and all of Georgia. Thank you Governor Kemp and all of the legislators in the General Assembly who delivered for free enterprise this session!