National study ranks state's tax burden 38th
MONTGOMERY — Alabama ranks 38th in the nation for the tax burden on its citizens, according to a new national study.
The Tax Foundation projects that Alabama's state, city and county governments will collect $3,144 per person in taxes in 2008. That will be the lowest amount per capita of any state.
But when the amount is compared to the state's per capita income of $36,372, the taxes amount to 8.6 percent of the per capita income. That ranks Alabama 38th.
Nationwide, the nonpartisan tax research group says the average taxes for this year will be $4,283. That represents 9.7 percent of the per capita income of $44,254.
The foundation said the highest tax burden as a percentage of income is in New Jersey, at 11.8 percent, and the lowest is in Alaska, at 6.4 percent. Alaska is a state where a majority of the taxes, largely on energy, are paid by out-of-staters.
Jim Bryce, a law professor at the University of Alabama with expertise in state and local taxes, said Alabama's relatively low tax burden is not surprising because the lowest ratios are in states with relatively low per capita income.
"If you're a taxpayer, that's great. If you're a public employee, that's probably not too great," he told the New York Times Regional Newspapers.
Among Alabama's neighboring states, the Tax Foundation calculates the tax burdens at 7.4 percent in Florida, 9.9 percent in Georgia, 8.9 percent in Mississippi and 8.3 percent in Tennessee.
Kimble Forrister, state director for Alabama Arise, an organization that lobbies for the poor, said Alabama's overall numbers don't present the true picture for certain groups in the state.
For instance, Alabama continues to have one of the nation's highest income tax rates for the working poor despite making changes two years ago.
"Alabama has very low effective tax rates on high income people, so the low and middle income groups make up the difference," Forrister said. "If you only had the Tax Foundation study to go on, you would think that middle-income Alabamians paid low state and local taxes."
Bryce said taxation results from balancing factors like government needs, expectations by taxpayers and government efficiency.
"Certain parts of state government clearly need more money, suggesting state revenues should be greater. Look at the crisis areas like our prisons," he said. "The flip side of that is governmental waste that's a natural factor of government."
