In Fiscal Year (FY) 2016, Georgia collected $37.8 billion in state and local taxes—or $3,663 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average Georgia taxpayer can afford this level of taxation?
To better answer this question, this analysis will calculate Georgia’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.
Fortunately for taxpayers, as shown in Chart 1, Georgia’s state and local tax burden (tax collections divided by private sector personal income) was the tenth lowest in the nation for FY 2016 at 12.6 percent—or -12 percent below the national average of 14.3 percent.
#Georgia state and local #taxburden in FY 2016 was the 10th lowest in the nation at 12.6%— -12% below US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #GApol #GAleg #GAsenate #GAgov #PolicyData (click to tweet)
As shown in Chart 2, Georgia’s tax burden has increased over time by 66 percent to 12.6 percent in FY 2016 from 7.6 percent in FY 1950.
To put Georgia’s tax burden into perspective, let’s compare it to size of major industries in the state (as a percent of private sector income). As shown in Chart 3, Georgia’s 12.6 percent tax burden is greater than these combined industries: manufacturing (9.8 percent), utilities (0.9 percent), and arts, entertainment, and recreation (0.7 percent).
#Georgia state and local #taxburden > combined industries: manufacturing, utilities, and arts/entertainment http://bit.ly/2FX9C8F @keypolicydata #GApol #GAleg #GAsenate #GAgov #PolicyData (click to tweet)
Georgian’s lower than average state and local tax burden is driven by a low corporate income tax burden (0.3 percent, 17th lowest), and all other taxes burden (1.4 percent, 7th lowest).
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Georgia—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The 20 Georgia counties with the highest local government tax burden include:
The 20 Georgia counties with the lowest local government tax burden include:
Note: The tax burdens for counties with large military bases, such as Chattahoochee and Liberty Counties, are inflated because, by definition, military compensation is excluded from the denominator as it does not constitute private sector activity.
Additionally, military activity often physically crowds-out the private sector pushing it out into surrounding areas. While a significant portion of surrounding private sector activity is due to the presence of the base, it is counted in the counties where the business is physically located. Thus, the tax burden, as a percent of private sector personal income, is overstated in counties with military bases and understated in surrounding counties.
Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.