In a move aimed at putting more money in the pockets of American families, the Internal Revenue Service (IRS) has introduced new tax brackets. According to CPA and market analyst Dan Gertrude, these changes could have a significant impact on Americans’ finances. Additionally, startling numbers have emerged, indicating that the United States currently holds approximately one-third of the global debt.
In Georgia, House Republicans are taking steps to provide further financial relief to parents. House Speaker Jon Burns recently announced a proposal to increase the amount that parents can deduct per child from their yearly state income taxes. The plan seeks to raise the deduction from the current $3,000 to $4,000. With Georgia’s income tax rate currently at 5.49%, this could potentially translate to as much as $55 more per child, amounting to approximately $150 million statewide.
Speaking at a news conference, Speaker Burns acknowledged the growing burden of rising child care costs and expressed hope that the additional deduction would help alleviate some of these expenses for parents. The proposal comes as Burns and other representatives face reelection later this year, highlighting the potential political implications of the tax cut.
In addition to the proposed increase in child tax deductions, Burns has also put forth a plan to raise the state homestead exemption from $2,000 to $4,000. This adjustment could result in significant savings for homeowners, potentially reaching nearly $100 million statewide.
The state’s senators have responded with a counterproposal to cap the rate at which assessed property values can rise for tax purposes. If implemented, this measure could limit future property tax increases. However, the increased exemption and other changes would require statewide voter approval through a November referendum.
Moreover, Speaker Burns has shown support for Republican Governor Brian Kemp’s plan to accelerate an already-planned cut in the state income tax rate. The current flat income tax rate of 5.49% is set to decrease incrementally until reaching 4.99%, contingent upon state revenues. The plan announced by Governor Kemp in December aims to retroactively reduce the rate to 5.39% as of January 1. This adjustment is projected to cost the state approximately $1.1 billion in foregone revenue.
Furthermore, Speaker Burns has unveiled a proposal to transfer all of Georgia’s unallocated surplus cash into its rainy day account. This move aligns with Governor Kemp’s push for responsible fiscal management. At the end of the last budget year, Georgia had $10.7 billion in unallocated surplus, in addition to a rainy day fund filled to the legal limit of $5.4 billion. By designating the surplus as savings, the state aims to ensure financial stability and provide taxpayer relief to Georgia families in both the short and long term.
However, the practical implications of placing all surplus cash into the rainy day fund remain uncertain. Lawmakers can only spend up to the amount authorized by Governor Kemp, whether from the rainy day fund, unallocated surplus, or regular revenue. Nevertheless, this action could potentially alleviate political pressure to spend the surplus, a move that Governor Kemp has been cautious about in the past.
Democrats have criticized the surplus, arguing that the state should prioritize addressing critical needs instead of accumulating excessive cash reserves. Democratic Senator Nabilah Islam Parkes of Lawrenceville raised concerns regarding the $16 billion surplus and $11 billion in unallocated funds at a recent news conference. She emphasized the need for reinvesting tax dollars to improve the lives of all Georgians.
As the 2024 campaign trail unfolds, these tax proposals and financial decisions will undoubtedly play a significant role in shaping Georgia’s political landscape. Stay informed with the latest updates, exclusive interviews, and more political content.
