Hooray — Alabama is no longer the worst state in the United States regarding taxing the income of our poor.But it’s really not all that much to celebrate. Now we are the second worst. That does not give Alabama any bragging rights.
According to a study released this week by the Center on Budget and Policy Priorities, Alabama comes in just behind Montana for taxing the poor. From a moral standpoint, that’s like coming in second place in a puppy-beating contest.
The change comes as the result of a tax break that was approved by the Legislature last April. The state began phasing in the tax cuts the first of January.
“We made a lot of progress, but this is something we need to keep pushing,” Gov. Riley said.
The sad thing is, for Alabama to claw its way to its new second-worst position, lots of “progress” was made.
Alabama used to tax a single family of three after their first $4,600 of income. Now that number will increase to $9,800. For a two-parent family of four, it will increase from $4,600 to $12,500.
While we are glad to see some improvement in Alabama’s grossly unbalanced income tax system, those numbers are far from encouraging. Alabama’s poor will still be paying income taxes on what can barely qualify as “income.” It’s almost like we are penalizing them for getting jobs.
What’s worse, those tax changes do little to keep up with spiraling costs of living – especially increases in fundamental necessities like utilities and gasoline.
Riley is to be commended for pushing the initial tax breaks through the system last year, and he is right on the money when he said it is “something we need to keep on pushing.”
As it stands now, Alabama is among 15 states at the bottom of the heap that are requiring families living below the national poverty level to pay income taxes.
The Daily Home joins the governor in requesting that the Legislature increase the thresholds again and enact other exemptions for dependents and households with incomes less than $100,000.
It’s not only the morally right thing to do, it should help stimulate the state’s economy and help more people move from welfare to the working world — which is a win-win situation for the entire state.
Of course, that would be just another small gain for the state, moving Alabama into fourth place, on equal footing with Indiana.
