Georgia Tax Exemptions Under the Microscope


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This week the Georgia Budget and Policy Institute (GBPI) released a new issue brief detailing the impact of taxing groceries. In it, they recommend that “all exemptions, credits, and deductions should be examined and weighed against each other and against the principles of tax reform.” 

Loophole-closing reform is a vital step toward a more sustainable sales tax, to be sure. But there are many other exemptions in Georgia’s tax code that should be studied closely and potentially eliminated before Georgians pay sales taxes on food. For example, Georgia offers one of the nation’s most generous exemptions for retirement income, and the state also offers an unusual and regressive tax deduction for state income taxes paid.

The debate over exemptions is heating up because the Special Council on Tax Reform and Fairness for Georgians will make their tax reform recommendations soon, and the media is reporting that one potential “reform” would be to add food back to the sales tax base. Let’s hope their recommendations take aim at other exemptions that wouldn’t so dramatically raise taxes on low-and middle-income families.

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