Georgia House approves a flat tax

ATLANTA (AP) – The Georgia House has approved a bill changing the state’s varied income tax levels to a flat 5.4 percent.

The chamber voted, 126 to 40, in favor of the bill sponsored by Rep. Jay Powell, R-Camilla. Current law sets income tax rates between 1 and 6 percent, based on taxable state income.

The bill also creates a new “earned income tax credit,” matching a federal credit.

State officials estimate that the change means the state will get $18 million less from income taxes in the financial year beginning June 2018.

The bill goes to the Senate for consideration.

The left-leaning Georgia Budget and Policy Institute has warned that a flat income tax will mean higher income taxes on low and middle-income people, particularly those who do not have children.