Posted by Our state pushes a disproportionate share of the tax burden off of the wealthiest and onto the poorest, to the point that “Alabama has the most regressive tax system in the United States,” according to Gov. Bob Riley and others. The Press-Register calls this “morally indefensible.”
Scott Stantis of The Birmingham News has a particularly nice illustration of the point in an editorial cartoon last week. I reprint it here with permission. Click on it to see a larger image.
Rep. John Knight has offered a proposal (HB 274) that would remove the state portion of sales tax on groceries (4%) and offers other tax relief for all Alabama tax filers, and would remove the state income tax deduction for federal income tax paid. General details are here and specifics are here.
Three points about the proposal:
- Most Alabamians would overall pay less or break even in state taxes.
- The proposal from Rep. John Knight “will lower overall state taxes by about 1% of income for those at the bottom, lower them slightly for those in the middle, and increase them by nearly 1% for those at the top.” Which, as you can see from the illustration, is a slight move toward tax fairness.
- Alabama has the lowest tax burden per person in the nation, and of course this proposal does not change that. We will still have the lowest tax burden per person if this passes.
The bill has passed the House. If it passes the Senate and is signed by Riley, the proposal will face a vote of the people in November.
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How if the proponents of bill can get re print rights, that cartoon would go a long way to convincing folks to vote yes in November.
Need to see if got some heat transfer paper left and a clean t shirt around the house.
What are the percentage figures based on? For example, how much in state taxes does someone who earns $30,000 pay? (Is there a calculation on how much state sales tax someone pays who earns that amount of money?) I frequently hear that we have a regressive tax rate, but I have not seen figures to back up that statement.
Mullet,
Here is a post that references a B’ham News quote citing studies that have found that…
I am sure there is probably more info available around about that.
Now, lets all sing Kumbaya and pat ourselves on the back for ‘helping the poor’. Do you think it will enhance your interview at the pearly gates? I guess Jack Williams thinks so, but his day is coming. This measure is a simple, socialist economic redistributivist policy. In the age of a shrinking economy, Alabama desires to punish producers to help non-producers? Please, Welfare is a way of life for these people so ‘it’ costs them nothing. Working poor? go back to college, trade school etc., and improve your lot at your own expense. Small business is sick and tired of subsidizing every socialist policy that comes along. Now they come in the name of “Jesus and Christian duty”. Had most hard working people desired to have too many children, not pursue higher education and other self improvement opportunities, no one would produce anything. This measure is an incentive for producers to produce less and move jobs out of alabama. Capital is not a captive audience, welfare and stupidity is a captive audience. Jack Williams and John Knight are a captive audience.
Publius, is it always wrong when folks act out of their own self interest?
Danny,
Looking at the dollars in those percentages. . .
The guy paying 3.6% of his income in taxes is contributing more than $26,000 to state revenues while the guy paying 10.6% is paying a little over $3,000.
I think it is always useful to look at both the precetages and the real dollars.
Mullet,
This is the report that you see cited most frequently:
http://www.itepnet.org/whopays.htm
They’re currently working on a new version right now…though Alabama’s tax system (or any state’s, really) hasn’t fundamentally changed since it was released.
Just so you fools know who is providing statistics to the Alabama Legislature (who heretofore is bereft of statistics unless in involved the calculus of pac to pac transfers from a lobbyist goon} it is a cadre of socialist/Obama supporters with ties to the EU and Iran. Wake Up People, the enemy is now here, not a world away!!! John Knight… what a stooge for falling for this.
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President: Richard Pomp
University of Connecticut Law School
Vice-President: Robert Kuttner
The American Prospect
Howard Chernick
Hunter College
Henry Coleman
Rutgers University
Iris Lav
Center on Budget and Policy Priorities
Marie Monrad
Robert Reich
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Jean Ross
California Budget Project
Dianne Stewart
Center for Public Policy Priorities
Dean Tipps
Service Employees International Union
Susan, you are absolutely right. But do we like the fact that Alabama taxes people in poverty at such a high rate, much higher than other states? And at a higher rate than it taxes people with more means? Do we want to be a state that taxes people in poverty deeper into poverty?
I think a lot of folks tend to agree with the Press-Register (and others who have made similar comments) that it’s “morally indefensible”…
Besides my purely selfish interests in seeing the sales tax dropped, there are a couple of other things to consider, it makes those on the low end better able to buy the goods and services provided by the top end. At $20k a year, things like dental care, fair trade organic foods, and routine medical care are luxuries.
However it looks like this issue is dying in the Senate, where all good idea go to die.
[...] Scott Stantis of the Birmingham News illustrated that nicely in a cartoon here. [...]
>>the poorest 20 percent of Alabamians (who made under $13,000 a year) paid 10.6 percent of their incomes in state taxes, compared to 3.8 percent for the top 1 percent of taxpayers (whose annual earnings approached $700,000).
So, it costs the poor just over $1300/year to live in Alabama, while the rich are charged about $25,000/year for the same right. Those poor people sure are getting screwed…
>>Susan, you are absolutely right. But do we like the fact that Alabama taxes people in poverty at such a high rate, much higher than other states? And at a higher rate than it taxes people with more means? Do we want to be a state that taxes people in poverty deeper into poverty?
Poor people should go on strike. They should stop being poor for a while. They should earn more money and pay the rich people rates. That would teach those Montgomery politicians a lesson!!!
Sounds like someone needs to re-read Rand.