Booklet describes shameful state tax law in plain words
When talking with lawmakers, lobbyists know how to put the hay down where the goats can get it, to use a phrase favored by the late George Wallace. That's one reason Alabama's tax system helps certain special interests while hurting people who possess less influence in Montgomery.
A new publication by advocates for children and the poor does an impressive job of describing that tax system and arguing for changes that would make it fairer and more adequate to serve citizens' needs.
"The Alabama Tax & Budget Handbook," published by Arise Citizens' Policy Project and VOICES for Alabama's Children, is as simple an explanation of state taxation as you're likely to find. Graphics and cartoons illustrate it. But don't let the cartoons keep you from taking it seriously.
"All four legs of our tax system need repair," the handbook says. "Of all the state income taxes, Alabama's is the only one that hasn't been revised in the last 15 years to relieve low-income taxpayers. Our sales taxes rise year after year, taxing low-income workers deeper into poverty. Our property taxes have increased little since the end of segregation. And business taxes have dropped as the number of State House lobbyists has grown."
The income tax was progressive when it was set in 1935, the booklet says. "Progressive" means that the more you earn, the higher is the percentage of income that you pay in taxes. Now it's just the opposite — regressive. Alabama begins taxing a family of four at an income of $4,600, which is less than one-quarter of wages considered poverty-level.
The remedy? The booklet suggests raising the personal exemption, standard deduction and dependent deduction; linking these benefits to federal levels to keep them in line with the cost of living; eliminating the deduction for federal income taxes paid, which mostly benefits high-income taxpayers; and raising the rate to 6 percent from 5 percent on income above $150,000 per couple.
The state could improve the sales tax, which is even more regressive, by removing or rebating tax on necessities such as groceries and medicine and by taxing personal and professional services, the booklet says.
Hurricane Katrina is bringing out the best in Alabamians — empathy for those enduring hardships and willingness to help them. But we ought also to be concerned about those whose hardships are imposed not by nature but by our own government.
You can download the handbook from www.arisecitizens.org or order it from (334) 832-9060. Send a copy to your legislator.