Why not tax the other minority?

The state needs more revenue.
The governor knows it. The House, despite passing a reckless budget that would imperil the lives of many on Medicaid and risk federal funding, knows it.
So the Senate, left to do the hard work of governance without assistance, is beginning to talk publicly about the need for a tax increase. The issue is what segment of the population will shoulder the burden.
The obvious solution is one that legislators are steadfastly refusing to mention.
The state’s tax burden on the poor is heavier than that of any other state. Residents at poverty level pay the same income-tax rate as those with million-dollar paychecks. The poor and middle class pay a much greater percentage of their income on sales taxes for groceries than do the wealthy.
The wealthy in Alabama pay lower taxes than in other states. The same flat income tax that disproportionately burdens the poor is a benefit to the rich.
The state has the lowest property taxes in the nation, a fact that provides no benefit to the growing class of Alabamians who own no property.
The state is one of three that offers a full deduction on taxes paid in federal income tax. The deduction provides little benefit to the poor and middle class, but a huge benefit to those with the highest incomes.
The segment of our population that is least burdened by state taxes is also the segment with the best ability to pay them: the wealthy.
The obvious answer, therefore, is to give the people an opportunity to vote on whether to increase taxes on the wealthy. Not recklessly, as they are valuable members of our state, but to a reasonable rate that brings their tax burden to a level that is on par with other low-taxing states.
Instead, though, legislators are talking about increasing taxes on cigarettes.
This is not an inherently bad idea. Cigarette smoking is bad for those who do it and burdens the health system. As a solution to the state’s chronic budgetary woes, though, it is a cop-out.
Most smokers are poor or middle class. A study in Georgia found the bottom 20 percent of income earners pay 18 times more in tobacco taxes, as a percentage of their income, than the top 20 percent.
Cigarette taxes are a way to wring more money from the segment of our population that already carries the greatest tax burden.
Conveniently, cigarette smokers are a minority. Increasing their taxes carries little political risk.
The question, though, is why legislators will not increase taxes on another minority: wealthy Alabamians.
The answer speaks volumes on what is wrong with our state government.


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Filed under Alabama politics, Tax reform

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