News from the Tennessee Valley Opinion
SUNDAY, MARCH 19, 2006


Poor residents need immediate tax cut

The Alabama House voted last week to scuttle a compromise bill to cut income taxes, and in doing so highlighted one of the critical philosophical differences between Democrats and Republicans.

The House unanimously passed immediate income tax relief for the state's poorest workers because members who opposed the bill knew it was going to pass anyway. None of them wanted to be on record as voting against it. It passed 101-0.

The bill differs from the one Gov. Bob Riley backed that would phase in tax relief over five years.

Republicans' amendment failed, also. One would have duplicated the compromise bill that phased the tax cut in over five years. The other one would have given tax breaks to some of the state's higher income earners.

Democrats defeated both attempts to change the bill, which now must go to the Senate when the Legislature returns March 28 from spring break.

The bill that passed the House raises the income level at which residents pay taxes. Currently, that level begins at $4,600 for a family of four. The bill, like the earlier compromise bill, raises the level to $12,600, without giving nearly everybody a tax cut.

It also sets the standard deduction for a couple earning under $20,000 at $7,500 instead of $4,000 and raises the couple's child deduction from $300 to $1,000.

Republicans made a good point that a couple earning $31,000 is not rich and needs more than the $500 child deduction in the new bill for such a couple. But their goal was to expand relief to higher bracket taxpayers.

The ins and outs of the compromise bill, its demise and the defeated amendments are that Democrats are attempting to give tax relief to the most needy without including it for affluent taxpayers.

Republicans want the relief to go to nearly all taxpayers.

The debate is not over caring about people but over philosophy. Republicans, from Washington to the statehouses, still believe in the Reagan trickle-down effect of tax cuts.

Democrats think the trickle down stops short of the people who need relief the most.

Offering a tax cut is good politics during an election year, but immediately elevating the income level at which poor people have to pay taxes plays better year-round regardless of political party affiliation.

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