James L. Evans|
Good news, bad news about taxes
The old Hee Haw television series featured a comic routine that revolved around Archie Campbell as the local barber telling his customer about the good news and bad news events in his life. Well, we've got a similar routine working here in Alabama; unfortunately it's not all that funny.
The good news really is good news. After nearly two decades of effort, the Alabama state Legislature has finally changed our income tax system. Alabama has had the unenviable distinction of being the only state in the union that imposes income taxes on citizens earning less than $10,000 — in fact, considerably less. Up until this session of the Legislature, a family of four earning $4,600 was subject to state income tax.
But with the combined efforts of Rep. John Knight, a long-time outspoken critic of Alabama's tax system, and Gov. Bob Riley, who from the beginning of his term has been talking about changing Alabama's tax structure, a dialogue began that led to a compromise that finally resulted in significant and positive change.
Beginning in 2007, Alabama will no longer tax families earning as little as $4,600. That threshold will now begin at $12,600 for a family of four.
That's the good news; now for the bad news.
The bad news is in Alabama we begin imposing income tax on a family of four earning as little as $12,600. No, we are no longer at the bottom in terms of taxing the poor. Now three states are below us in imposing income tax on families earning even less than $12,000. But that is hardly a distinction of merit.
Our income tax structure, while better now, is still grossly unfair to the working poor. Even with the changes to the income tax, the lower 20 percent of wage earners in Alabama continue to pay a higher percentage of their earnings in state and local taxes than do the highest earning 5 percent. If we must have an income tax, then it must be fair. It is not fair, and never will be fair for those who earn the most to pay the least.
Even with the changes — as important and as welcomed as those changes are — our tax system in Alabama continues to punish the poor while rewarding the wealthy. To continue to allow such a situation to exist is cruel from any point of view, and particularly cruel from a Judean-Christian point of view. The Scriptures are consistent in their call for the wider community to love kindness and to do justice for the least of these in our midst.
I know the risk here is to sound like the glass is half empty, but it took 18 years to finally raise the level of awareness among Alabamians that our tax system was punishing the poor. Without a doubt, $12,600 is much better than $4,600. But the fact remains that no one who earns such a small salary, especially with a family, should owe any income tax.
We have taken an important first step. Let us pray now that we will have the courage and resolve to take the additional steps needed to ensure that our tax structure is fair to everyone it affects.
James L. Evans is pastor of Auburn First Baptist Church. He can be reached at email@example.com.