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Georgia’s Tax Breaks are Costly

January 29, 2015  |  Georgia Budget and Policy Institute
The information provided here is for informational and educational purposes and does not necessarily reflect the opinion and/or policy position of the Georgia Municipal Association.

Georgia’s assortment of tax breaks is projected to cost the state treasury an estimated $8 billion in the 2016 budget year.

A recent analysis by the Georgia Budget and Policy Institute (GBPI) indicates that tax breaks will cost Georgia an estimated $8 billion in FY 2016. Two-thirds of that amount is from various sales tax exemptions with the rest coming from "exemptions from the state’s personal income tax, corporate income tax and miscellaneous levies like Georgia’s new system of taxing cars."

The report does make it clear that not all tax breaks are bad public policy:

"Not all tax breaks are bad public policy. Some are designed to keep the state’s tax system from unduly harming either low-income Georgians or people struggling to stay in the middle class. Groceries, prescription drugs and goods bought with food stamps are exempted from Georgia’s sales tax for that reason. Georgia seniors aren’t asked to pay income taxes on their Social Security benefits. Low-income workers get tax credits to help them afford the rising costs of childcare and other necessities. These types of policies should certainly be monitored to ensure efficiency, but generally they are essential tools lawmakers should maintain and, in some cases, expand." 

More information can be found in GBPI's fact sheet, Tax Facts: Georgia Gives Up Billions through the Tax Code.