In addition, a decision has to be made whether the revenue will be allocated to the jurisdiction of employment or the jurisdiction of residence, or split between the two jurisdictions. In most states the tax is imposed either on the resident, with all of the revenue going to the individual's jurisdiction of residence, or the tax is imposed on employees who work in the jurisdiction, with all of the revenue going to the jurisdiction in which the individual works. Because a local earnings tax has several desirable features, serious consideration should be given to implementing a one percent local tax on earnings in the entire Atlanta metropolitan area. How the tax revenue should be allocated depends upon the purpose for implementing the tax. Second, a local earnings tax could be used to finance primary and secondary education.
Income taxes are more closely related to ability to pay than property taxes.
Thus, the second option to consider is a one percent tax on earnings based on place of residence levied throughout the metropolitan area, with the revenue allocated to school systems. Third, a local earnings tax could be used solely to reduce property taxes. The principal issue is the allocation of revenue between the various local governments. There is no one best approach to the allocation. Thus, the third option is to consider a local earnings tax within the Atlanta metropolitan area for the purpose of reducing property taxes, with the specific allocation of revenue to be determined.