Comparison of Riley / Bedford / Knight Tax Fairness Plans

Tax Plan	Current	Riley	Bedford	Knight
Reform strategy		Increase income tax deductions over five years, ultimately cutting education revenue by $214 million.	Increase income deductions, end deduction for federal income tax, and remove 4 percent of the tax on groceries.	Increase income tax deductions to federal levels and end deduction for federal income tax.
Fully implemented		2011	2007	2007
Personal exemption	$1,500 per adult	$1,600 per adult in 2007 $2,000 in 2011	$2,000 per adult in 2007	$3,200 per adult in 2007*
Dependent deduction	$300 per child	$600 per child in 2007 $2,000 in 2011	$2,000 per child in 2007	$3,200 per child in 2007*
Standard deduction	$4,000 maximum; less under $20,000 income	$4,000/couple in 2007 $7,000/couple in 2011	$4,000 per couple in 2007	$10,000/couple in 2007*
Inflation adjustment		None	None	Annual increase as federal deductions grow
Deduction for federal income tax	Yes	Yes	Not allowed	Not allowed
Maximum family tax cut in 2007		$55 for every family of four, rich or poor, in 2007 ($370 in 2011)	Up to $536 for family of four	Up to $760 for family of four
Winners/losers		Small tax cut each year for every person	[Not yet calculated]	3 out of 5 pay less; 1 of 5 pay more; 1 pays same
Vote of people required?		No	Yes	Yes
Cost to education budget		$28 million in 2007; $214 million in 2011	$ 0 (Revenue-neutral.)	$ 0 (Revenue-neutral.)
Income tax threshold for family of four. Threshold: You start to pay tax on the next $100 after the sum of your deductions.	$4,600	$8,800 in 2007; $15,100 in 2011	$12,100 in 2007; same in 2011	$22,900* in 2007, growing with inflation to roughly $27,000 in 2011

*These numbers are in 2005 dollars. The Knight Plan will adjust these deductions for inflation. Assuming a 3 percent rate of inflation, the income tax threshold under the Knight Plan will be roughly $27,000 by 2011.

Arise Citizens' Policy Project P. O. Box 1188 Montgomery, AL 36101 (334) 832-9060 www.arisecitizens.org 1/27/06