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Gov. Kemp signs flat tax bill | Here's what it means

Critics said the law will mostly benefit upper-income Georgians.

ATLANTA — Gov. Brian Kemp signed into law a new tax cut that will drain money from the state budget and give it back to Georgians. Critics said the law will mostly benefit upper-income Georgians.  

Higher-income folks will get tax breaks worth hundreds or thousands of dollars under this measure. The bottom 20% will get an average tax savings of about $27 per year, according to the left-leaning Georgia Budget and Policy Institute.

Kemp signed it at a well-known restaurant in Bonaire, the White Diamond, which happens to be on the home turf of David Perdue, the Republican running against him in the GOP primary.

It eliminates the graduated income tax where higher-income folks paid a larger rate – and replaces it with a flat tax embraced by conservatives.

"This tax cut is designed to put more money in hardworking Georgians’ pockets. And before they leave today, since they got the money coming, they can buy something on the way out" of the restaurant, Kemp joked.

Currently, the top tax rate in Georgia is 5.75. This law will cut that to less than 5.5% in two years. Then it would continue to drop to below 5% by 2029.

It also generously increases the standard exemption – more than fourfold for single filers, and ups deductions for child dependents. One projection said the bill will cost the state treasury about a half-billion dollars in its first year.  

The bill includes a way to walk back the tax cut. The tax cut stalls if state revenue stops growing or if the state’s rainy day fund surplus gets depleted.

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