Georgia Income Tax Rate Cap, Amendment A (2014)

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Amendment A
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Type:Constitutional amendment
Constitution:Georgia Constitution
Referred by:Georgia Legislature
Topic:State legislatures measures on the ballot
Status:Approved Approveda
2014 measures
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May 20
Democratic Primary AQs Approveda
November 4
Amendment A Approveda
Amendment B Approveda
Referendum 1 Approveda
Endorsements
Polls
The Georgia Income Tax Rate Cap, Amendment A was on the November 4, 2014 ballot in Georgia as a legislatively-referred constitutional amendment, where it was approved. The measure prohibited the state from increasing the maximum state income tax rate above that in effect on January 1, 2015.[1]

Since the maximum state income tax rate on January 1, 2014, will be six percent, the rate at which the state's income tax will be capped is six percent. Theoretically, a special session could be called to increase or decrease the tax rate before January 1, 2015.[2]

The amendment was sponsored in the Georgia Legislature by six state senators, all Republicans, as Senate Resolution 415.[3]

Election results

Georgia Amendment A
ResultVotesPercentage
Approveda Yes 1,855,380 73.88%
No655,91726.12%

Election results via: Georgia Secretary of State

Text of the measure

Ballot title

The official ballot title appeared as follows:[4]

To prohibit an increase in the state income tax rate in effect January 1, 2015 (Senate Resolution 415).[5]

Ballot summary

The official ballot text appeared as follows:[1]

Shall the Constitution of Georgia be amended to prohibit the General Assembly from increasing the maximum state income tax rate?

( ) YES
( ) NO[5]

Constitutional changes

See also: Article VII, Georgia Constitution

The amendment added a Paragraph IV to Section 3 of Article VII of the Constitution of Georgia:[1]

Paragraph IV. Increase in state income tax rate prohibited. The General Assembly shall not increase the maximum marginal rate of the state income tax above that in effect on January 1, 2015.[5]


Support

Supporters

Officials

Senate

The following state senators voted to place the amendment on the ballot:[6]

Note: A yes vote on the measure merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Amendment A.
House

The following state representatives voted to place the amendment on the ballot:[7]

Note: A yes vote on the measure merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Amendment A.

Individuals

  • Paul Rubin, Professor of Economics at Emory University[8]
  • Dwight Lee, Research Fellow at The Independent Institute
  • Jeffrey Dorfman, Professor of Agricultural & Applied Economics at the University of Georgia
  • Christine Ries, Professor of Economics at Georgia Institute of Technology[9]

Arguments

Sen. Buddy Carter (R-1) sent out a newsletter detailing the state's three ballot measures. The following was an excerpt from his summary of Amendment A:

Although somewhat symbolic, capping the rate at this level would improve Georgia’s competitiveness while bringing certainty to businesses contemplating expansion decisions in our state.

While Georgia’s total tax liabilities (income taxes, corporate taxes and sales taxes) are very competitive, we have one of the highest income tax liabilities of any of our southeastern neighbors. In fact, our 6 percent rate is the highest in the southeast when compared to the 5.8 percent in North Carolina and 5 percent in Alabama. Tennessee only taxes dividend and interest income and Florida has no state income tax.

By passing this amendment, Georgia would become the first state to cap the income tax in its constitution and would prevent any future income tax increases above 6 percent.[5]

—Sen. Buddy Carter[10]

Other arguments in support of the amendment included:

  • Senate President Pro Tem David Shafer (R-48) argued, “It makes it clear that our income tax rate is not going up. It helps increase our competitiveness by pointing out to businesses making expansion decisions that while other states could increase their rates tomorrow our rates are constitutionally capped.”[2]
  • Jeffrey Dorfman, Professor of Agricultural & Applied Economics at the University of Georgia, said, "Businesses want to know that government will keep its promises. This is a way to establish some credibility. It won’t mean a business boom, but it might help steer some businesses and jobs our way from neighboring states."[8]
  • Christine Ries, Professor of Economics at Georgia Tech, stated, "I think we know for sure that… increased risk assessment really holds down investment activity, especially when you’re going state to state. One of the risk assessment problems is political risk. Companies do this all the time, (judging) whether a particular political climate is inherent in a state or is going to change over time. Right now, Georgia is seen as a fiscally conservative state, and I don’t think most analysts are looking at it and saying Georgia might turn around and change tomorrow… But anything that makes the public policy more reliable is going to lower the risk assessment and increase investment in the state or country."[9]

Opposition

Opponents

Officials

Senate

The following state senators voted against placing the measure on the ballot:[6]

House

The following state representatives voted against placing the amendment on the ballot:

Individuals

  • Wesley Tharpe, policy analyst at Georgia Budget and Policy Institute[8]

Arguments

Wesley Tharpe, policy analyst at Georgia Budget and Policy Institute, offered commentary on data related to state income taxes and migration published by the Center on Budget and Policy Priorities. He stated:

It turns out that over the past two decades, footloose Americans were about as likely to switch from a low-tax state to a high-tax one as vice versa, sometimes even more likely. More residents relocated from no-income-tax Tennessee to income-taxing North Carolina over the past two decades than moved in the other direction, to cite on example...

This finding is especially relevant to Georgia, where anti-tax activists routinely claim our 6 percent income tax rate prompts wealthy people and potential “job creators” to leave for places without income taxes, especially Florida and Tennessee. The fact is more taxpayers moved to Georgia from Florida since 1993 than the other way around...

These trends make sense when you think about the many reasons why people choose to move. New job opportunities, housing costs and being closer to family are the most common reasons for an interstate move, according to both expert research and explanations from the movers themselves. Of the seven economists who published peer-reviewed studies on the subject since 2000, six concluded that taxes were not a key consideration when people relocate to another state. When the U.S. Census Bureau recently asked people why they switched their state of residence, 55 percent answered either “new job or job transfer” or “other family reason.”

The idea that state income taxes would cause Georgians to leave for Florida or Tennessee might make sense on an intuitive level, but closer examination reveals how it’s based on a handful of anecdotes rather than data-based facts. Relying on the falsehood as a guide for state tax policy is likely to do more harm than good. Slashing Georgia’s income taxes would do next to nothing to boost our state’s economy, but surely lead to big cuts in schools, hospitals and other ingredients of growth. Those public investments are essential incentives for Georgians to stay here and for newcomers to move here. [5]

—Wesley Tharpe[11]

Other arguments against the amendment included:

  • Senate Minority Leader Steve Henson (D-41) said that the income tax rate hasn't increased since the 1980s. He argued that the amendment was a campaign tool for Republicans, saying, "Know that as legislators and as government we need to have different tools and different options available and voting for that restricts it. The only reason we’re doing it is so that we will have a campaign tool during the election."[2]

Media editorial positions

See also: Endorsements of Georgia ballot measures, 2014

Support

  • The Augusta Chronicle said, "Two of our neighbors, Florida and Tennessee, have no state income tax. North Carolina recently lowered its state tax. That makes those states more attractive to business and industry looking to relocate. Preventing an increase in Georgia sends the positive message that our state is committed to low taxes."[12]
  • Valdosta Today said, "There are risks in chiseling the marginal tax rate in stone. But there are risk to any policy, taxing or otherwise. The upside, however, far outweighs any risk regarding the this proposal."[13]

Polls

See also: Polls, 2014 ballot measures
Georgia Income Tax Rate Cap Amendment (2014)
Poll Support OpposeUndecidedMargin of ErrorSample Size
Sand Mountain Communications, LLC
8/24/2014-8/25/2014
57.03%21.42%21.55%+/-2.471,578
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Path to the ballot

See also: Amending the Georgia Constitution

The amendment was required to be approved by a two-thirds vote in both chambers of the Georgia Legislature in order to be placed on the ballot. SR 415 was approved by the Georgia House of Representatives on March 18, 2014. The bill was approved by the Georgia Senate on March 20, 2014.[3]

House vote

March 18, 2014 House vote

Georgia SR 415 House Vote
ResultVotesPercentage
Approveda Yes 119 68.79%
No5431.21%


Senate vote

March 20, 2014 Senate vote

Georgia SR 415 Senate Vote
ResultVotesPercentage
Approveda Yes 42 76.36%
No1323.64%

See also

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Additional reading

References