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1 Jonathan Williams, Georgia's Tax System: A Factual Foundation for Fundamental Tax Reform 1 (2007)

handle is hein.taxfoundation/ffhhxz0001 and id is 1 raw text is: ATION

January 30, 2007
Georgia's Tax System: A Factual Foundation for Fundamental Tax Reform
by Jonathan Williams
Fiscal Fact No. 77
As policymakers begin the 2007 legislative season, it is evident that tax policy will be one of the major
policy items on the agenda. Several leading elected officials have recently offered their own tax reform
plans, and these will be among the options considered by the legislature during this year's session. One
tax reform plan would eliminate the statewide income tax; another would eliminate the state property
tax; and others would make smaller changes, such as reducing taxes for seniors and cutting the car tag
tax.
However, before lawmakers proceed to consider possible changes to the tax structure, it is important to
examine how Georgia's tax system ranks when compared to other states - especially contiguous states
that compete with Georgia in today's competitive economic environment.
Georgia's Tax Burden
In both real and comparative terms, Georgia's state and local tax burden has increased substantially since
1970. By burden we mean the fraction of state income taken by taxes of any kind. Georgia's 2006 tax
burden of 10.4 percent of income is average and ranks 25th nationally. However, when compared
regionally, taxpayers pay the second highest tax burden among bordering states - only residents of North
Carolina pay more at 10.5 percent (see Table 1).
Table 1. Georgia's State-Local Tax Burden Has Increased Since 1970

State
............................ ...... .
North Carolina
:Georgia
:South Carolina
Florida
Alabama

2006 Rank                       1970 Rank
2006 Burden     (1 is highest)  1970 Burden     (1 is highest)
10.5%           23            8.7%z             37
10.4%            25i           8.7%z             41
10.2%           30i           8.5%z             43
9.7%o            3 9::         8.8%o             36U
z                                                z
8.8%             46,i           8.2% i           46i

Tennessee                     8.6Oo          47           8.7%o           40zz
Source: Tax Foundation, based on data from Bureau of Economic Analysis, Dept. of Commerce. See
,http ://wx  .t ax foundation, or~/taxdatashow/  6. html

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