AJC: General Assembly cancels state income tax credit for poor

[gpatt0n]

[lotstodo]

That is only the REFUNDABLE portion of the tax credit. In other words, you can't pay less than zero state income tax. The article also ignores the fact that the state sales tax was modified to exclude certain necessities in order to provide sales tax relief for the poor.

[Cathyhelms]

That is only the REFUNDABLE portion of the tax credit. In other words, you can't pay less than zero state income tax. The article also ignores the fact that the state sales tax was modified to exclude certain necessities in order to provide sales tax relief for the poor.

 

Ummm, it's the liberal AJC, what do you expect?? If you don't pay taxes, how can you get a "refund"???

[bluebonnet]

Pubby, this "low income credit" was a waste and poorly utilized in my opinion. Let me explain: Couple 1 --ages 66 & 67 make $70000 annually in pensions and interest income. they also earn $25000 in Social Security. Do you realize on the Georgia tax return every penny of their earnings are exempt from tax? Georgia gives up to $35000 per taxpayer exemption on retirement/investment earnings plus full exemption of Social Security (if you are 65 or older). So Couple 1 shows zero income and actually gets a $20 "low income credit"!!!!!!

 

Couple 2 are 30 year olds with a couple kids and $30000 income. They rent because they can't qualify for a home loan and they don't have enough deductions to itemize on the Federal return. So they take a standard deduction of the federal return ($11400 this year)but are only allowed a $3000 deduction for Georgia. A couple who owns a home and has $25000 mortgage interest & other itemized deductions gets to write off the entire amount $25000 on their Georgia return. But our Couple 2 end up owing tax to Georgia because of the pitiful Georgia standard deduction. Most states allow a standard deduction equal to....or greater than the Federal standard deduction. So some people making over $100,000 are actually getting this "low income credit" while the younger poor are forced to pay tax on all but $3000 of their income! If we really want to help the poor in Georgia, we need to get the standard deduction up to the Federal amount.

[EagleWings]

When was the last time pubby posted something good from the General Assembly? Oh, since the Republicans took control, that is.............

[rednekkhikkchikk]

A couple who owns a home and has $25000 mortgage interest & other itemized deductions gets to write off the entire amount $25000 on their Georgia return.

 

I assume with $25000 mortgage interest per year this couple has a much higher income than the couple in the first example (else how could they afford their mortgage or even qualify, for that matter?)

 

Deductions only reduce the taxable income. Credits are deducted from the tax owed. Two different things...

[bluebonnet]

I assume with $25000 mortgage interest per year this couple has a much higher income than the couple in the first example (else how could they afford their mortgage or even qualify, for that matter?)

 

Deductions only reduce the taxable income. Credits are deducted from the tax owed. Two different things...

 

 

I am quite aware of the differences in deductions and credits. And you would be surprised at the number of people paying over $20000 in mortgage interest who earn well under the income of couple #1. Where have you been the past decade? With the easy credit, second mortgages, equity lines......and now rampant unemployement, .....you would be surprised. The amount was just thrown out there. The point was, there are many very well off people who pay NO state tax and get a LOW INCOME CREDIT while others who have much less income not only don't get a credit, they owe GA tax on FAR less income. Give THEM a fair standard deduction.

[MaineGal]

I have to agree with Barbed Wire on the GA standard deduction. It is very off balanced from the federal, and probably most states. The most I have ever owed for state taxes (not in GA) was $85. Same income, expenses, kids, etc, owe Georgia $700.