James July-August 2025 web - Flipbook - Page 61
eorgia’s economic
edge is no longer guaranteed.
States like Florida, Tennessee,
Texas— and now
Mississippi— are not just competing. They’re actively building tax
environments designed to siphon
off investment, talent and growth
from slower-moving rivals. Georgia’s current tax approach is too
passive for this new reality. Without urgent acceleration, we risk
falling behind—and losing the next
decade of prosperity.
The Southern Tax Race
Georgia’s 5.49 percent flat
income tax— though a marked
improvement over its previous
graduated rates— is no longer
competitive in the Southern landscape. Florida and Tennessee have
eliminated income taxes altogether. Texas, despite long-standing
property tax concerns, continues
to lure firms out of California and
the Northeast thanks to its favorable regulatory posture and lack of
income tax.
Mississippi is now actively
phasing out its income tax, joining the “zero-tax club.” In 2022
Mississippi passed House Bill 531,
eliminating the bottom bracket
entirely and reducing the top rate
from 5 to 4 percent by 2026. Gov.
Tate Reeves and legislative leaders have made their goal clear: full
income tax repeal within the next
decade. While no official zero-date
is set, the political commitment is
real— and aggressive. Mississippi
is moving faster than expected,
and if Georgia doesn’t act, we’ll be
watching them pass us by.
Meanwhile, North Carolina has
executed one of the most successful tax reforms in the nation. In
2013, the state shifted from a multirate system to a flat tax and has
steadily reduced it ever since— from
7.75 to 4.75 percent today, with a
glidepath to 3.99 percent by 2027.
North Carolina also reduced corporate income taxes and broadened
the base, boosting both business
recruitment and revenue stability.
Even Arkansas and Louisiana— states with deep economic
challenges— are phasing in lower
income tax rates. Arkansas is targeting a 4.4percent top individual
rate. Louisiana’s 2021 constitutional amendment capped income tax
rates and enabled future reductions without legislative gridlock.
of $39 billion in adjusted gross
income (AGI) in 2021 alone. Texas
gained $10.7 billion. Georgia, by
contrast, gained only $4.2 billion,
largely limited to inbound moves
from lower-income states like Alabama and South Carolina.
What’s worse: much of Georgia’s gain is concentrated in Metro
Atlanta, while rural counties continue to depopulate. Between 2010
and 2020, over 60 Georgia counties
lost population. A handful of major
metro county areas-- Fulton, Cobb,
Gwinnett, Forsyth, and Cherokee-accounted for most of the state’s net
growth. Economic opportunity is
unevenly distributed, and without
competitive tax structures statewide, this imbalance will worsen.
Today’s high-net-worth individuals and corporate decision-makers are more mobile than ever. Remote work, private capital markets
and flexible business structures
mean that tax codes, not just quality of life, determine location decisions. According to a 2022 Charles
Schwab study, nearly 72 percent
of investors and entrepreneurs
now consider tax environment a
“primary factor” in where they live
Losing the Migration War
and work. A difference of two or
From 2020 to 2023, Florida
gained over 1 million new residents three percentage points in income
tax rates can trigger billions in lost
and many are high-net-worth,
or gained economic activity across
high-income earners and business
state lines.
owners. According to IRS migration data, Florida saw a net inflow
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