Sales Tax on Groceries Before Senate Today
Alabama takes 11.2 cents of every dollar earned from those on the low end of the income scale, and takes 5 cents of every dollar earned by those at the high end of the income scale - in state and local taxes combined. (Click for source - pdf file.)
Scott Stantis of the Birmingham News illustrated that nicely in a cartoon here.
If that seems fair to you, then you probably are not interested in HB 274, a proposed constitutional amendment to take some sales tax off groceries (the 4% state portion) and remove a deduction for federal income tax paid (allowed in only two other states).
If it ultimately passes, people on the low end of the income scale would pay 9.6 cents of every dollar earned in combined state and local taxes and those at the high end would pay 5.8 cents of every dollar earned. (Click for source - pdf file.)
An unsung portion of this bill is that it would also raise the standard deduction and personal exemptions for everyone - and index it to inflation. Middle income couples have a standard deduction of $4,000, and that has been unchanged since 1982. This bill would raise it to $11,100 and index it to inflation. A family of four has to pay tax on income as low as $12,600; this bill would raise that threshold to $20,000 for every such family.
If the bill passes the Senate today, it would go to a vote of the people.
Updated below with charts.
This chart below shows who pays what under current Alabama law.
This chart below shows who would pay what if HB 274 were passed.
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An unsung portion of this bill is that it would also raise the standard deduction and personal exemptions for everyone - and index it to inflation.
I don’t understand why this portion hasn’t been better publicized. It could make a huge difference in how the bill is perceived. I hope the Legislature does the right thing today and lets the people vote, but I’m not holding my breath.
Comment by Kathy — May 19, 2008 @ 12:56 pm
As an initial matter, I don’t know whether the percentages are correct or not. But let’s assume they are. The average income of the lowest 20% is approximately 10,000 and they pay 11% in taxes which equals about $1,100. The top 1% earns approximately 1,000,000 and pay 5% in taxes which equals about $50,000. Is that so inequitable?
Comment by Mullet — May 19, 2008 @ 7:45 pm
Mullett, who should the life preserver be tossed to, the man tired of rowing or the man drowning?
Comment by walt moffett — May 19, 2008 @ 8:23 pm
Walt,
I don’t really think that is an apt analogy.
Comment by Mullet — May 19, 2008 @ 10:35 pm
Mullett, you don’t see us all in the sea of taxation?
Comment by walt moffett — May 20, 2008 @ 9:25 am
Walt,
Life is cruel. We are all the end result of our choices. Perhaps you saw “the lifeboat’ since you used a lifeboat analogy. That movie was a perfect example of your false dichotomy. Nazi prisoners are the poor. (no im not saying the poor are nazi’s). Both made choices that landed them in their own lifeboats. We are all in lifeboats, so to speak. In the real world, only the strong survive. In america, the worthless and weak are paid to overbreed and enjoy society at other’s expense. In that regard, they are Hitler’s ’superior race’… how odd is this?
Now you and yours want to give them more? I’m glad you werent running the lifeboat in the movie, the nazi’s would have killed you, and your family, and by extension, the USA. That is all they wanted, all along. So, Blacks paid to overbreed? Mexican illegals rampant? Al Qaeda Ops latent cells? Do you think they are all here for different reasons? No, Walt, but they are here thriving courtesy of Americans like you, casting a dilletante eye and sophist’s views upon their sole objective; to commandeer the life boat.
Only the strong survive. I would swim rather than seek comfort in your lifeboat, Walt. Tis better to die using the last ounce of one’s God given talents, than to them waste in some creed outworn by time, yet revived by stupidity and politics. Truth is immutable, all else waxes and wanes. FYI, are not you a lawyer? You should know better.
Comment by Mr. Coot — May 21, 2008 @ 11:40 pm
Coot,
This is not about giving to the poor. It’s about taking less from the poor. Why should the poor be asked to give more of every dollar earned?
Only the strong survive? If they are so strong, why shouldn’t they show that strength and provide at least as much out of every dollar earned as people who make less?
Comment by Anonymous — May 22, 2008 @ 5:21 am
Mr Coot, nice to see that you have stared into the abyss.
Comment by walt moffett — May 22, 2008 @ 9:10 am