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Education savings accounts in Georgia empower parents to customize their child's education.

Key Points

  • Education plays a powerful role in breaking the cycle of poverty and helping children lead healthy, flourishing lives. Education savings accounts in Georgia are a solution to help more kids get the benefits of a quality education. 
  • Georgia’s education savings account program is the Promise Scholarship. Starting in fall 2025, it will give eligible families $6,500 scholarships to access the education option that best meets their child’s needs. 
  • Education savings accounts, or ESAs, in Georgia can have several positive impacts on communities, including better support for public schools, less crime, and greater upward mobility. 

Education is an essential building block for a healthy, flourishing life. It has the power to break the cycle of poverty that can persist across generations.

When children from impoverished backgrounds receive a quality education, they’re more likely to escape poverty themselves and provide better opportunities for future generations. 

Good education goes hand-in-hand with many other positive outcomes—like better jobs, higher personal income, valuable relationships, better physical health, and a longer life. 

We all want these good things for children in our communities. Education savings accounts are one solution that Georgia can use to increase opportunity and prosperity for students who need it most.

What are education savings accounts?

Education savings accounts, also called ESAs, give parents a portion of state education funding that they can use to tailor their child’s education if traditional public school isn’t a good fit.

ESA programs expand education opportunity by giving parents greater flexibility and freedom in education choices. Whether a family prefers homeschooling, private schooling, or other alternatives, ESAs let parents access the best type of education for their child’s unique needs and interests.

The Georgia Promise Scholarship helps students in low-performing public schools access education options for their needs.

Get Started With Georgia’s ESA Program: The Georgia Promise Scholarship

Georgia is getting ready to launch Promise Scholarships in the fall of 2025. If you’re interested in enrolling your child, make sure you’re signed up to hear about next steps.

Get on the List for Updates

How do ESAs work?

To create education savings accounts programs, states must first pass a law. States then take a portion of what they would have spent on the student’s public school education and put it into a state-administered account.

Parents can use these funds for a range of education expenses—tuition, tutoring, homeschooling curriculum, educational therapies, online programs, or even a combination of educational services. States require parents to complete an application process to switch to an ESA. 

What do families get from education savings accounts in Georgia?

  • Flexibility: ESAs let parents customize their kid’s education.
  • Financial Support: ESAs allow states to expand access to options that families may not be able to afford otherwise. 
  • Empowerment: Parents can take charge of their child’s education journey with confidence.
  • Diverse Options: Parents can explore various educational paths that suit their child’s needs and interests.

What is Georgia’s ESA program?

Created in 2024, Georgia’s ESA program is the Georgia Promise Scholarship. It provides state-funded scholarship accounts that give eligible families $6,500 per student for each school year.

The program will be available starting in the 2025-2026 school year, and it will be limited to students in the lowest-performing public schools.

Child raising hand in classroom

Georgia’s Promise Scholarship Explained
Find out what the program is, how it works, and which students will be eligible. 

See the Promise Scholarship FAQs

Who do education savings account help in Georgia?   

ESAs are for all kinds of students. Whether a child is struggling in school or has special learning needs, ESAs can help. Georgia’s ESA program, the Promise Scholarship, is specifically designed to help families who may not have the resources to access better opportunities. 

Students in Underperforming Schools

Thousands of Georgia kids are stuck in public schools that have received a failing grade from the Governor’s Office of Student Achievement. To help these kids in particular, the Promise Scholarship will be for students in the bottom 25% of Georgia’s public schools. With an ESA, these students can access higher-quality education options that prepare them for successful careers and fulfilling lives.  

Low-Income Students

Choosing a different school or educational path has often been a privilege for wealthier families. What about families that struggle to make ends meet? 

With an ESA, low-income families can consider schooling options that may be out of reach otherwise. The Georgia Promise Scholarship makes sure these students are helped first. Available scholarships will go to families below 400% of the federal poverty level (around $120,000/year for a family of four). Any leftover funding can then serve students above that threshold. 

Students With Special Needs

ESA programs are a lifeline for students who need support beyond what their local public school can provide. ESAs make it possible to access schools that are set up to help students who have unique learning needs and disabilities. ESA funds can also help pay for other essential resources like tutoring, therapies, and learning technologies. 

Homeschooling Families

ESAs don’t just cover school tuition. They can pay for curriculum, online programs, and supplies, giving parents the option to fully customize their child’s education. This flexibility means that ESAs can help families who want to homeschool as an alternative to public or private schools. 

What kind of impact could ESAs have on communities in Georgia? 

Since Georgia’s ESA program, the Georgia Promise Scholarship, is new, it will be a few years before we know its exact impact on our communities. But we can get an idea from other states that have ESAs, including a couple of Georgia’s neighbors.

  • Better support for public schools: In 2011, Arizona became the first state to adopt ESAs. The state soon found that the program was helping to redirect state and federal dollars back to public schools where it could be used for teacher pay and operational needs.

  • Better outcomes for low-income students: Created in 2019, Florida’s ESA program is now the largest in the country. A November 2023 study of Florida’s education system looked at the impact of growing school choice. It found students of lower socioeconomic backgrounds—including those who stayed in public schools—experienced some of the greatest benefits.

  • Better economic opportunity and healthier societies: Tennessee is still working to expand its ESA program, but a study from the Beacon Center of Tennessee found that a statewide program could have incredible social impact. Their model predicted that Tennessee could have more high school graduates, higher overall personal income, less criminal activity and fewer felons, and $2.9 billion in economic benefits.

Do parents want education savings accounts in Georgia? 

Overall, Americans are worried about the direction of public K-12 education. 

  • Half of Americans think it’s moving in the wrong direction. 
  • 82% of teachers say the state of public K-12 education has worsened in the last five years. 
  • Only 46% of school parents in Georgia think K-12 education is on the right track in the state of Georgia. 

It’s not surprising, then, that Georgia parents are open to more school choice policies: 76% of Georgia school parents say they’re in favor of an ESA program.

A majority of school parents in Georgia think it's a good idea to have education savings accounts in Georgia.

What are common concerns about education savings accounts in Georgia?

Concern: ESAs take funding away from public schools.  

Georgia communities don’t have to worry about this because state lawmakers are not using public school funding for the Georgia Promise Scholarship. Promise Scholarship funding is also not allowed to exceed 1% of public school funding. This set-up means public school funding is fully protected. 

In general, more research is showing that, when states invest in school choice programs like ESAs, public schools benefit financially and academically. They have more per-pupil funding, less budgetary pressure, and better student outcomes. 

Concern: ESAs favor wealthy families and don’t help kids who actually need the opportunity. 

Quality education is a building block of a healthy, flourishing life, regardless of a family’s financial situation. ESAs are a tool states can use to ensure there’s more equality when it comes to education opportunities. 

Even if an ESA program is universal—where every student is eligible—the students who gain the most opportunities are those most in need. Here in Georgia, our ESA program, the Promise Scholarship, limits eligibility to students in low-income households to make sure they get helped first. 

Concern: ESAs are just another private school voucher. 

Education savings accounts can be used for private school tuition but also for much more! Unlike private school scholarships, ESAs can be used for a wider range of education expenses—including tuition, tutoring, online programs, education therapies, curriculum, and textbooks. 

Concern: ESAs don’t help families in rural areas. 

Rural areas may not have as many schools to choose from, but thanks to the flexibility of ESAs, this doesn’t have to be a reason for states to avoid ESA programs.

Take Tanya Schlegel’s story, for example. Tanya is a mom of two kids with special needs living in rural Georgia. Despite her best efforts to work with the local public school, it just isn’t equipped to give special needs students the help they need. An ESA would give her the resources to homeschool and access specialized therapies so that her kids can have the type of education that matches their needs. 

Georgia ESAs: Quick Facts

  • Georgia is one of 16 states with an ESA program. 
  • 10 states have universal ESA programs, meaning all students are eligible. Georgia is not yet one of them. 
  • Georgia’s ESAs are worth $6,500 per student per school year.
  • 76% of school parents in Georgia support ESAs.

Interested in Georgia’s ESA program? 

Go here to sign up for updates as the Georgia Promise Scholarship gets up and running. 

Other Schooling Options in Georgia

Man sitting with his hands folded

Key Points

  • Indiana passed a scholarship program that will allow any family below 400% of the amount required to qualify for the federal free and reduced-price lunch program to access education scholarships.
  • South Carolina expanded their scholarship program with similar guidelines to those in Indiana.
  • Georgia failed to pass a transformative education scholarship program that would have positively impacted the lowest performing communities in the state.

The year isn’t even halfway over, and six states have already enacted laws that create universal educational access for all students in 2023.

In total, Iowa, Utah, Arkansas, Florida, and now South Carolina and Indiana have enacted either universal—or nearly universal—educational opportunity this year. That’s on top of Arizona and West Virginia, which did so in 2021 or 2022.

Each state has its own version of a scholarship or educational savings account that the state funds for children’s needs outside of traditional public school. For example, these types of accounts send a portion of each student’s public school dollars to allow the child to attend a private school of their family’s choice. In some cases, families who choose to homeschool their children can use the funds for educational expenses.

 

Indiana

Indiana is the most recent state to join that list. That state’s scholarship program will now be available to any family below 400% of the amount required to qualify for the federal free and reduced-price lunch program. That translates to a salary of around $222,000 a year for a family of four. 

Previously, requirements were in place that further limited the program, such as it only being open to families with students previously enrolled in a public school or to children in the foster care system. Under the new law, only an estimated 3.5% of Indiana’s families won’t qualify for this option.

 

The Georgia Center for Opportunity led a state-wide campaign to educate parents and legislators on the positive impact that choice brings to public education.

The Georgia Center for Opportunity led a state-wide campaign to educate parents and legislators on the positive impact that choice brings to public education.

South Carolina

Meanwhile, South Carolina governor Henry McMaster recently signed a bill into law that eventually expands that state’s scholarship program to families at or below 200% of F&R priced lunch as well. The program is more limited in scope than Indiana’s. It will only be available to 5,000 students the first year, 10,000 the second year, and 15,000 students the third year.

South Carolina’s program allows for the establishment of Educational Scholarship Trust Funds. Funds deposited in these accounts can be used not only for expanded school choice, but may also be used for special needs therapies, such as physical therapy, speech therapy, and occupational therapy. Tutors and transportation may also be included for families caring for special needs students. 

So, what happened in Georgia?

If the Georgia Legislative Session had passed Senate Bill 233, also known as the Georgia Promise Scholarship Act, it would have put $6,500 per student back into parents’ pockets so they could fund the best educational approaches for their children. The funds would have been eligible for use as private school tuition and public school alternatives, such as homeschooling. 

According to the Georgia Department of Education, families who qualified would have had students enrolled into the lower 25% of schools in Georgia. This amounted to roughly 400,000 students. 

SB 233 was a strong bill, passing the Senate with unanimous Republican support and going on to the House. Despite receiving no support from Senate Democrats, it’s excellent news that the bill made it so far through legislative proceedings. 

The House vote proved to be tougher, with bipartisan representatives voting against it. Rep. Mesha Mainor of Atlanta was the lone Democrat in the House to vote in favor. On its final day of session, SB 233 was only six votes short of the 91 it needed to pass. 

The good news is that the Georgia Promise Scholarship Act is eligible for reconsideration during the 2024 legislative session. 

Looking to what’s next

Public schools are not the problem. We love and support public schools—they will remain the right and best choice for the vast majority of Georgia families. But we can love, support, and move public schools forward while expanding education into new areas.

Public education is a foundational and vital part of the success of American society, but an increasing number of families are looking toward alternatives—and their choices are just as valid. We must work to deliver quality education to all students, which means finding ways to support families who take a different schooling path. While many will access their education through public schools, not all kids are a perfect fit for that system, and they cannot be left behind.

education outcomes 2023

We have much to celebrate as the 2023 Georgia legislative session comes to a close. At the same time, there is still much work to be done. That’s what this blog post is all about. First, we’ll take a look at recent victories in the area of education during the session. Then, we’ll talk about the road ahead—what still needs to be accomplished for the good of Georgia’s schoolchildren and families.

The Georgia Center for Opportunity team serves as an important source of information to lawmakers on the impact new laws can have on communities around Georgia, particularly the poor and underrepresented.

School literacy bills

A bright spot in the 2023 legislative session was the passage of two literacy bills that will improve reading and writing skills among Georgia’s kids. According to the Georgia Department of Education, only 64% of Georgia’s third-graders read at or above grade level. These bills will pave the way for our children to enjoy greater literacy, which will impact their educational and professional future.

Here is more about the two bills:

House Bill 538: The Georgia Early Literacy Act requires the state Board of Education to “approve high-quality instructional materials to be used for teaching students in kindergarten through third grade.” This will give Georgia an opportunity to raise the bar on literacy education for public school students in every community. 

Senate Bill 211: This legislation establishes the Georgia Council on Literacy. The Council will work with local school systems to develop a five-year plan to improve reading and writing among Georgia’s students. Coupled with state-approved instructional materials, we have renewed hope for seeing significant improvements in literacy over the next few years.

 

School safety

The next bill passage regards school safety, which is always an incredibly important topic, but which has received heightened attention in recent months. Here’s a look at the coming changes.

    • House Bill 147: The Safe Schools Act requires local school districts to develop safety plans and submit those plans to the Georgia Emergency Management and Homeland Security Agency (GEMA/HS). Because of the heightened threats on schools these days, having districts work with the experts at GEMA/HS will increase the safety of our children.

 It’s important to act quickly, and act together, for the benefit of our kids.

 It’s important to act quickly, and act together, for the benefit of our kids.

School accreditation

Finally, let’s go over the school accreditation bill that passed during this year’s session. 

    • Senate Bill 204: This legislation puts parameters on what K-12 school accreditation organizations can consider when they evaluate school districts. The bill is designed to address concerns that these organizations were limiting local elected school boards’ important discussions and debates.

 

Bad news from the 2023 Georgia legislative session

Now for the bad news. Despite passing in the Senate and making significant gains in the House, the Promise Scholarship bill (SB 233) didn’t get enough votes to pass on the last day of session. This delay has forced 500,000+ kids in failing public schools to wait yet another year for this critical education option.

Georgia’s General Assembly missed opportunities to adopt three other good education reforms. We’ll address each, but first, we’ll cover what happened to SB 233. 

 

What happened to promise scholarships?

The Georgia Promise Scholarship Act, SB 233, would have given parents $6,500 per year, per student to find the right education options for their kids. This would have opened up many non-traditional options, including private school, for families who want alternatives to the public school route. Eligibility would have been narrowed to around 400,000 kids stuck in the bottom 25% of public schools, based on the Georgia Department of Education’s evaluation.

    • The Promise Scholarship bill passed the Senate with unanimous support from Republican senators but, sadly, received no support from Democratic senators. It went all the way to the House of Representatives for a vote. The fact that the bill made it that far in the legislative process is good news.
    • On the last day of session, SB 233 received 85 votes in the House—six votes short of the 91 needed for passage. Sixteen Republican representatives voted against the bill. All but one Democratic representative voted against SB 233: the brave Rep. Mesha Mainor (Atlanta), who voted for the bill on behalf of her constituents’ interests.
    • Thankfully, SB 233 is still on the table for the 2024 legislative session. In the meantime, Georgia students stuck in underperforming schools will be forced to wait another year for this education option to be considered.

The ugly: Public school transfers, charter school management, and tax credit scholarships

As promised, let’s look at three other important opportunities the Georgia Legislature missed during the 2023 session. None of the following bills gained the traction they needed, depriving Georgia families and children of important or increased educational opportunities for at least one more year. 

    • Senate Bill 147 would have allowed students to transfer to attend better public schools, even if it was in a different school district. Other states like Arizona, Florida, and Indiana have seen success with similar laws. The bill never gained any traction, but can be considered again next year.
    • House Bill 318 would have streamlined the oversight of state- and locally-authorized charter schools. The bill passed the House and Senate with bipartisan support, but late amendments to the bill delayed the process. The Legislature adjourned for the session without the opportunity to agree to the Senate changes.
    • House Bill 54 would have increased the cap on Georgia’s Tax Credit Scholarship program from $120 million to $130 million. After going through changes in the House, the bill passed that chamber and moved on to the Senate. In a raucous Senate Committee meeting, the Tax Credit Scholarship portion of the bill was amended several times with unfriendly amendments, and ultimately, the bill died. Fortunately, the program is still operating under the existing cap of $120 million, giving Student Scholarship Organizations the opportunity to continue serving many Georgia students.

Looking toward 2024

While Georgia made important strides forward in school literacy, safety, and accreditation for 2023, there’s still much to be desired when it comes to opportunities for students and their families. It’s our mission to continue championing the value of bills like SB 233. Putting school funding into the hands of parents who wish to depart from the state’s status quo only makes sense; families’ tax dollars should support whatever educational path they choose. 

Likewise, school choice and tax credit scholarships should be open to a wider demographic of families statewide. It’s important to act quickly, and act together, for the benefit of our kids. As we look forward to the next legislative session, we’ll do everything we can to champion positive change.



HS boy with tablet

Key Points

  • On the House side, the leadership team has nearly universal pro-educational opportunity voting record in recent history.

  • Seventy-five percent said “students are mostly still behind due to school closures” from the pandemic, while two-thirds of parents said their students have lost learning due to the pandemic. 

  • Georgia must follow in the footsteps of states like Arizona and West Virginia, which recently passed significant new laws that expand educational access for all.

Those who support opening up access to all educational options for every child in Georgia have a lot to celebrate this holiday season. That’s because a new lineup of leadership in the Georgia Legislature increases the likelihood that our state will soon see new and innovative ways for parents to access the right and best educational option for their child.

New leadership, new opportunities

Following the results of the 2022 elections, new leadership will be taking over both chambers of the state legislature. On the House side, the leadership team has nearly universal pro-educational opportunity voting record in recent history: Jan Jones (Speaker Pro Tem), Chuck Efstration (Majority Leader), James Burchett (Majority Whip), Bruce Williamson (Caucus Chair), Houston Gaines (Caucus Vice Chair), and Ginny Ehrhart (Caucus Treasurer) all have 100% pro-educational freedom voting records.

The only member of House leadership without a perfect record on these issues is the new House Speaker, Burns. But even he only has one vote off, the 2018 vote on the Educational Savings Account, the last time a bill of this nature was voted on in the House. Burns was nominated by the Republican caucus to become House Speaker beginning in the 2023 session.

What about on the Senate side? The good news is that only one member of Senate leadership — Jason Anavitarte, Caucus Chair — voted against the 2022 bill that would have created Promise Scholarship Accounts. But Anavitarte voted “yes” on other pieces of educational opportunity legislation, including raising the tax credit scholarship cap and increasing funding for charter schools. Other top members of Senate leadership — including President Pro Tem John Kennedy, Majority Leader Steve Gooch, and Majority Whip Randy Robertson — all have 100% positive voting records when it comes to educational opportunity.

Parents want more options

A recent poll from the Walton Family Foundation found that parents who voted are deeply concerned about the direction of K-12 public education in the United States.

The poll found that 72% of voters believe “improving K-12 education” should be a top priority for state lawmakers headed into 2023. Only the economy and inflation ranked higher at 76%. 

Americans are also still deeply concerned about learning losses from pandemic-induced classroom closures. Seventy-five percent said “students are mostly still behind due to school closures” from the pandemic, while two-thirds of parents said their students have lost learning due to the pandemic. 

On average, parents said their kids missed 21 days of school in 2021 due to the pandemic. 

As for what changes need to be in store for K-12 education, in Oct. 2021 36% of voters said they wanted to see “bold changes” for schools, while that number jumped to 46% by Nov. 2022. 

Voters’ top priorities include ensuring that every child is on track in reading, writing, and math; addressing the teacher shortage; offering more career and technical education; and improving security and safety on school grounds. 




Georgia must follow in the footsteps of states like Arizona and West Virginia, which recently passed significant new laws that expand educational access for all.

Georgia must follow in the footsteps of states like Arizona and West Virginia, which recently passed significant new laws that expand educational access for all.

Expanding educational access

Throughout the 2023 session, the Georgia Center for Opportunity will be advocating for a bill similar to the one in 2022, for Promise Scholarship Accounts. Key facets of these accounts would be to enable all Georgia families to attend the school that best fits their student’s needs.

The 2022 version of the bill would have offered families up to $6,000 a year for approved education expenses. Promise Scholarships would step far beyond a typical voucher by fully putting parents in the driver’s seat when it comes to their child’s education. The funds could have been used for private-school tuition, but there would have been added flexibility depending on each family’s unique needs, extending to paying for things like tutoring, specialized therapies, or homeschool co-ops.

Georgia must follow in the footsteps of states like Arizona and West Virginia, which recently passed significant new laws that expand educational access for all.



 

Key Points

  • As of June, 35 states and D.C. have not recovered the number of lost jobs
  • The labor force has shrunk despite population growth.
  • Its stated goal of the Federal Reserve remains the same–to reduce inflation to its 2% target, meaning it will take steps to prevent the price level from coming back down. This bad policy goal will burden the working class and the poor and retired persons the most.

It may not matter if federal policy does not change.

We’ve seen some back-to-back encouraging news within the last few weeks. The Employment Situation Report for July showed that the United States finally recovered the number of its lost jobs from the start of the pandemic, and the Consumer Price Index (CPI) inflation rate for July was essentially zero. But digging a little deeper to put the news into perspective reveals real concerns that stagflation will not end anytime soon.

The States Who Are Driving the Job Recovery

On the jobs front, yes, it’s true we’ve recovered the number of lost jobs benchmarked to February 2020 before the drastic impact on the labor market from COVID-19. This indicates we’re on the mend, but the job recovery process has not been the “V” shape hoped for at the beginning of the pandemic, one that would have meant a robust job recovery. 

Two-and-a-half years later, the civilian non-institutionalized population base that feeds the labor force grew by 4.8 million. Our own ARIMA Model job forecast shows we are approximately 5.8 million jobs short of where we would have been had the pandemic not happened. 

But this is not the case for all 50 states. Astoundingly, four states—Montana, Utah, Idaho, and Wyoming—have matched or nearly matched their pre-pandemic ARIMA Model forecasts, effectively eliminating any impact from the pandemic on the number of lost jobs. 

In the meantime, the national job recovery to pre-pandemic levels is driven probably by just 15 states who already recovered their number of lost jobs prior to the nation as a whole. These states are Utah, Idaho, Texas, Montana, North Carolina, Georgia, Florida, Tennessee, Arizona, South Dakota, Colorado, Arkansas, Indiana, and Nevada. 

As of June, the remaining 35 states and D.C. have not recovered the number of lost jobs. We have to wait another week before we know whether another state slipped onto the list of leading states that helped tip the balance for the national July data. 

According to our analysis, a common feature of the leading states is that they tend to have policies that value economic freedom more than the other states do. Incidentally, and for explanatory reasons and not for the purpose of getting political, all but three of the 15 leading states have given political control to the governor’s office and both chambers of the state legislature to the Republican Party.

Jobs Versus People Employed 

One problem with job data is that the dataset allows for double counting. If we want to count the number of people employed, it paints a different picture. 

The Current Population Survey shows the U.S. is still more than half a million workers short when compared to February 2020. In fact, we had fewer employed persons in July than March of this year, using seasonally adjusted data. 

The reason is that the labor force has shrunk despite population growth. This can be seen with the 62.1% labor force participation rate that is more than a percentage point below where it stood in February 2020.

This means that the 3.5% unemployment rate—which now matches its pre-pandemic level—is misleading. The shrinkage of the labor force is distorting the meaning of the metric.

Taken together on a national scale, jobs have recovered but the number of employed persons has not. This can mean only one thing. More people are working multiple jobs to make ends meet. 

Inflation versus the Price Level

July’s CPI ever-so-slightly decreased. It ticked down 0.2% at an annualized rate–a welcome change from the past 25 months. Just to keep this in perspective, the price level nonetheless increased 14.1% since the start of the pandemic. But there is no need to tell this to average consumers who have been feeling it in their pocketbooks. 

Disturbingly, the Federal Reserve shows no interest in doing something about the elevated price level–and who isn’t even discussing it. Its stated goal remains the same–to reduce inflation to its 2% target, meaning it will take steps to prevent the price level from coming back down. This bad policy goal will burden the working class and the poor and retired persons the most.

 

stagflation

“Disturbingly, the Federal Reserve shows no interest in doing something about the elevated price level–and who isn’t even discussing it. Its stated goal remains the same–to reduce inflation to its 2% target, meaning it will take steps to prevent the price level from coming back down. This bad policy goal will burden the working class and the poor and retired persons the most.”

“Disturbingly, the Federal Reserve shows no interest in doing something about the elevated price level–and who isn’t even discussing it. Its stated goal remains the same–to reduce inflation to its 2% target, meaning it will take steps to prevent the price level from coming back down. This bad policy goal will burden the working class and the poor and retired persons the most.”

Fiscal and Regulatory Policy

The Federal Reserve does not stand alone with its bad policy. Congress and the Administration are just as guilty, if not more so.

Excessive fiscal spending also drives up the price level. Worse, increasing business taxes will pull  resources from businesses. These resources are needed to produce goods and services that we all use and enjoy. It also enables these very same businesses to pay workers and compensate investors, and it leads to more economic growth and prosperity. Likewise, more excessive regulatory restrictions have similar negative effects on people and the economy.

Increasing business taxes and regulating businesses even more at this time will not help keep prices down. Rather, a good portion of these higher costs will be passed onto consumers.  And they will be passed on to consumers to the degree that individual businesses are able to do so. If businesses can’t pass all or even some of those costs on to consumers, then they will be forced to make more difficult decisions, such as cutting back on the number of employees or suspending pay raises to employees. Profits will clearly suffer that may cause a few businesses to scale back or exit the industry altogether. These consequential actions all aggravate stagnation. Add in the price increases and we get more stagflation, not less.

Unfortunately, the President just signed into law the erroneously named Inflation Reduction Act that will do nothing about inflation, but it will hike business taxes and increase regulations that will only worsen the economic situation. 

Congress and the Administration need to start following the lead from the states who are doing it right. Only pro- growth policies relying on innovation and production organically sprouted from within the economy will help us out of this mess, and it won’t work if politicians think that means taking money from successful businesses or imposing new mandates on others or picking the winners and losers in the economy.



 

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