Here's a comparison of Georgia's taxes to other states. I'll send out another update shortly showing your local taxes relative to other counties.

Last update, I described the manner in which Georgia collects money from taxpayers like you. And before that, the Budget update showed the proportion of taxpayer funds devoted to each major category of state services and mentioned trends driving the costs up.

HOW GEORGIA'S TAXES COMPARE WITH OTHER STATES:

Every state has a package of taxes with which to fund the many services it provides. For example, Texas and Florida don't have an income tax, and Georgia's is 6 percent. Florida and Texas levy 6 and 6.25 sales tax rates while Georgia's is 4 percent.

In comparing states and counties, though, what matters are what is the per capita tax burden and how is it distributed throughout the population. You may also prefer one method of taxation over another.

1. Here's an example of Georgia's tax burden relative to other states:

State tax revenue per capita: *higher rank equals higher taxes

State Rank Amount

Georgia 39 $1612

Delaware 1 $2697 High

S. Dakota 50 $1284 Low

Florida 43 $1487

N. Carolina 21 $1871

Georgia's 6 percent income tax rate is about in the middle of most states' rates. Eight states have no income tax - Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. The nation's highest income tax rates are Montana's 11 percent, California's 9.3 percent and Iowa's 8.98 percent. Twelve states levy 7 percent or more. Nine states (that have an income tax) levy less than Georgia's 6 percent rate.

Our 4 percent state sales tax rate is somewhat lower than the national average. More states fall into the 5 - 6 percent range. Five states do not have a state sales tax - Alaska, Delaware, Montana, New Hampshire and Oregon. California's is the highest at 7.25 percent.

2. State and local taxes combined - Of the 50 states, Georgia's per capita tax burden is 28th highest for state and local taxes. Combining state and local taxes provides a clearer picture for many reasons, including the fact that states differ in how they fund (locally or at the state level) activities such as education and health care.

For example, Georgia's split of public education funding between school boards and the state closely mirrors the national average. Georgia's school boards, on average, pay 45 percent and the state pays 49 percent (the federal government pays for 6 percent). But Illinois' school boards pay for 66 percent of education and the state government pays for 28 percent. On the other end of the spectrum is New Mexico whose school boards cover 15 percent and the state portion is 71 percent. This greatly affects the division of state and local taxes.

3. State and local taxes and other fees - Georgia ranks 34th highest when state and local charges, fees and others sources are added to the tax revenues.

4. Tax burden to retirees - Georgia ranks 41st in its state tax burden to retirees. If local taxes are included, the tax burden is somewhat less favorable.

5. Here's one example of the distribution of state taxes. (I added up the number of state income tax returns by income category and calculated the amount of state income tax each category of citizens pays.)

Fifty percent of Georgia's revenues are collected through the state income tax. And 86 percent of the taxes collected from the income tax is borne by 50 percent of the adult population (only counting legal residents with earnings or a retirement income of any kind). These families have a total income of $30,000 or more.

Another way of looking at it is that 50 percent of Georgia families pay almost nothing towards the total income taxes collected in Georgia. And income taxes pay for half of all services provided by the state.

You can imagine that if you surveyed Georgians asking if they consider the state income tax too high, half would almost certainly say no.

FINALLY:

Georgia has been economically competitive because of its overall low tax rates, compared to other states. According to a number of economists, tax reduction opportunities should focus on reducing Georgia's reliance on the individual income tax. Several of Georgia's economic competitors have eliminated theirs, including Florida, Nevada and Texas. From 1991 to 2001, these three states, (plus Georgia, I'm happy to say), have ranked in the top ten states in job creation. Studies show a negative relationship between income taxes and economic growth because of the disincentive to productive effort.

In fact, six of the eight states with no income tax rank in the top ten of states with the best business climate for business expansion and jobs creation. This is also true of states ranked according to the likelihood of small business survival, which supplies the majority of jobs.

Our state should rely more on fees for government services, where possible and reasonable, and sales taxes, which tax consumption, not productivity as income taxes do. (And recall from the last update, groceries and prescription drugs are excluded from Georgia state sales taxes, which makes our sales tax more equitable to all income groups).

As always, I welcome your thoughts and suggestions.

Best-

Representative Jan Jones - District 46

(Serving northwest Fulton, including parts of unincorporated, Roswell and Alpharetta)