2003 Gets a Re-Write
I know that politicking involves taking complex issues and reducing them to overly simplistic, emotionally charged sound bites that diminish your opponent and anyone who disagrees with you. But dismissing the failed Amendment One tax proposal in 2003 as a “call for a 1.2 billion dollar tax increase” is a gross oversimplification.
Siegelman and Baxley accused Riley of flip-flopping on issues, citing his call for a $1.2 billion tax increase in 2003 and now an across-the-board tax cut.
“He talks about tax relief. That’s like Tony Soprano talking about law and order,” Siegelman said.
Riley was as clear in 2003 when he talking about needing to help “the least of these” as he was in 2006 when he called the way we tax the poor in Alabama “unconscionable” that Alabama needs to fix its unfair tax system.
Alabama Arise (long time advocate for tax reform) holds that the principles of a sound tax system are that it be adequate, fair, simple and transparent. (FYI: Alabama Arise and VOICES for Alabama’s Children put together a well-received publication in the Alabama Tax & Budget Handbook - it’s a pdf file and quite large.) Frankly, Riley’s 2003 proposal went a long way toward addressing those issues.
I’m not interested in rehashing all the details here, but in the 2003 Amendment One proposal, the tax threshold on a family of four would have been raised from the nation’s lowest (at an “unconscionable” $4600) to $16,300. For everyone. That’s higher than the $12,500 threshold proposed in the this year’s Tax Fairness bill (and which would apply only to those making less than $20,000). Seventy percent of income tax filers would have paid the same or less. Loopholes were to be closed (for example, the one that allows banks to be exempt from paying sales tax to the tune of $22 million in lost state revenue). The state would have saved money by having teachers pay more for health insurance, and so on.
Many believed Alabama was facing a revenue shortfall. (Alabama’s revenue is largely dependent on unstable sources like income tax and sales tax that fluctuate with the economy. One time revenue sources had staved off disaster, but those funds were gone. Many thought the situation was dire.) When even in a good year, your state is still near the bottom of the nation in per-pupil spending, you are not exactly flush.
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My take is that if your family has to spend the inheritance you got from Grandma to get through a normal year, you have some cash-flow problems that one day are going to catch up to you.
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Turns out, the economy turned, those unstable revenues got better, and people want to pretend that having to spend those one-time-only sources of funds didn’t really indicate any problem. My take is that if your family has to spend the inheritance you got from Grandma to get through a normal year, you have some cash-flow problems that one day are going to catch up to you.
So rightly or wrongly, Riley made some hard choices and tried to address some of these issues like fairness (raising the threshold so that we don’t tax those in poverty at the worst rate in the nation, closing the loopholes that allow some to pay less than others) and adequacy (having enough to pay the bills). Remember that this is a former U.S. Congressman who never voted for a tax increase in his years in the House.
Yes, I think clearly Riley is now playing to his party base by proposing a plan that would give everyone at least a modest cut in addition to making the system more fair for those in poverty. But then and now, Riley was talking about tax fairness for the poor. It’s a bit disingenuous now to make it sound like Riley simply wanted to shakedown the state for a spending binge in 2003.
