State Representative Virgil Fludd, D-Tyrone, wants to add a “temporary” 1 percent income tax surcharge on Georgia’s highest earners as a way to raise more than $200 million for the state’s beleaguered budget.
Meanwhile in a column by Fludd in today’s Citizen, Fludd criticized Republicans in the General Assembly for a $500 million “property tax shell game” in which taxpayers will see actual tax increases this year because the homeowners tax relief grant has been eliminated. The GOP is the majority party in the legislature.
“All across Georgia, homeowners are watching their taxes go up while Republicans propose more tax cuts for companies that export jobs to other states,” Fludd said. “The hope is that with placebos like training courses for tax assessors, we won’t notice a half-billion dollar tax increase.”
At the same time, Fludd last week filed House Bill 1066 which would apply the temporary 1 percent surcharge for married couples who have a total income of more than $400,000 and single individuals with an income of $200,000.
The additional income tax surcharge affects less than 1 percent of Georgia taxpayers, according to a news release issued by Fludd.
The increase would be in effect for this year and 2011, expiring on Jan. 1, 2012, according to the bill submitted by Fludd.
“As we all know, the state of Georgia is facing tough times so we have to do everything we can to maintain a balanced budget without laying off teachers or eliminating important programs,” Fludd said. “No one likes tax increases but these are very unusual times. We need strong leadership because spending cuts alone will not solve our problems. HB 1066 will help prevent these devastating cuts, while only affecting less than 1 percent of Georgia taxpayers.”
The state of Georgia has not adjusted income tax rates in more than 70 years and currently has a top income tax rate of 6 percent beginning at $10,000. Other states have recently issued similar surcharges, including North Carolina and Wisconsin.
According to Fludd’s office:
• When North Carolina faced a $4 billion deficit in 2009, the state chose to enact more than $1 billion worth of tax increases. These increases included a temporary 2 percent surcharge on income between $60,000 and $150,000 for single filers and between $100,000 and $250,000 for married couples filing jointly. Income above those amounts was taxed an additional 3 percent. The 3 percent surtax was also placed on corporate income.
• Wisconsin enacted a 7.75 percent income tax bracket on all income above $300,000 for married couples and $225,000 for individuals and heads of households. The state also lowered the exclusion for capital gains income to 30 percent from 60 percent. These changes are expected to generate approximately $280 million for Wisconsin in the state’s 2010 fiscal year.
“Other states across the country are facing similar challenges as a result of this recession,” Fludd said. “31 states had tax increases in 2009 and six more are looking at increases in 2010.”
In his column, Fludd said, “This year, Georgia’s government must make a choice. Either continue to cater to special interests with tax breaks on symphony halls and sports museums or get back to basics.”
