Income inequality complicates Ga. consumption tax - | Chattanooga News, Weather & Sports

Income inequality complicates Ga. consumption tax

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ATLANTA (AP) - The growing income in the hands of the rich could complicate Republican efforts to replace Georgia's income tax with an expanded sales tax.

An analysis from Standard & Poor's Ratings Services found that as the income paid to the richest 1 percent increases, the growth rate of state tax collections drops. That drop appears more pronounced in states heavily reliant on the sales tax.

Roughly half of Georgia's funding comes from income taxes. S&P analysts said states more reliant on the income tax would likely see less-severe revenue losses.

In Georgia, some GOP lawmakers want to replace the income tax with a stepped-up sales tax.

Senior Republicans have not made a serious push for the plan, particularly as tax collections have still not caught up with pre-recession levels.

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