The committees are reviewing tax breaks to determine how much they cost the state and whether they do what supporters said they would.
Georgia first enacted a tax exclusion for retirees more than 40 years ago. It has increased several times and became a prominent part of Republican Sonny Perdue’s campaign for governor in 2002, when, as an upstart Republican contender facing a Democratic governor, he proposed slashing taxes on seniors.
Perdue passed bigger exclusions once he became governor. Currently, up to $65,000 per person in nonwork income is excluded from taxes for taxpayers 65 and older and $35,000 for Georgians ages 62-64.
Buschman’s report said that in 2021 the median tax break was $517 on about 947,000 returns filed by retirees.
The report said all 41 states with a state income tax offer some break for retirees.
A tax break on pensions and other retirement income for Georgia seniors will cost the state — and save retirees — about $1.37 billion this year, according to a new state audit report.
The report found little support for the notion that the retirement income exclusion played a significant role in persuading wealthy retirees to move to the state — one of its stated objectives — or that such an in-migration of retirees is a significant driver of economic growth.
The audit report by Robert Buschman of Georgia State University’s Fiscal Research Center — which provides the state with financial assessments of proposed tax breaks — is part of a series of reviews requested by the Senate Finance Committee and House Ways and Means Committee.
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