Tax Burden Puts Georgia at a Disadvantage

Published May 1, 2007

Georgia’s tax burden was 10.4 percent of income in 2006, which ranked the state 25th nationally, according to a Tax Foundation study released January 30, 2007.

But that middle-of-the-nation ranking means little when taking into account that every neighboring state except North Carolina has a lower tax burden than Georgia.

Analysis shows sound tax policy is crucial if Georgia is to gain an economic edge in the competitive southeastern United States.

“If you neglect your tax system, [and] have a great education system, great roads, your well-educated kids are going to use your well-paved roads to look to other states for work,” Tax Foundation economist Jonathan Williams told a crowd of more than 100 at a recent Georgia Public Policy Foundation policy briefing luncheon in Atlanta.

20 Percent Higher Burden

The Tax Foundation found Georgia’s state and local tax burden–the percentage of personal income taken by the government in the form of taxes at all levels–has increased substantially since 1970. Over the past 36 years, the state’s tax burden has increased nearly 20 percent as a percentage of personal income.

House Speaker Glenn Richardson (R-Hiram), who has hired economist Arthur Laffer to suggest ways to revamp Georgia’s tax system, levels special criticism at the ad valorem system.

“It was introduced for agricultural purposes to value land, and most property is no longer used for that purpose,” Richardson said. “It’s a problem when a family has lived in the same home for years and years and suddenly they can’t afford it anymore because their property taxes have increased so much.”

Kelly McCutchen and Benita M. Dodd