Fix the tax
Our View
Issue date: 4/4/08 Section: Opinion
Owing to its infernal constitution, Alabama has one of the most dysfunctional tax systems in America. Since we pay the nation's lowest property taxes, we have to fund a great deal of our government on sales taxes, the surcharges on items from TVs to candy bars that everyone buys. These taxable goods, however, include the very basic necessities of life. There's a plan currently working its way through the statehouse that would remove the sales tax on groceries, and it's a plan we absolutely support.
By its nature, the sales tax is a regressive tax. Sure, on the surface, a sales tax looks fair. After all, it's just a tax on consumption - the more you buy, the more you pay. But look at the numbers. Let's compare someone that makes $25,000 with someone who makes $100,000 a year. Let's say they spend the same amount on essential foodstuffs per month, $500. After taxing that $500 at 10 percent, they owe $50 in sales taxes for the month.
Over the course of a year, their food taxes total $600. For the person making $100,000 a year, their tax burden is equal to .6 percent of their total income. For the person making $25,000, that percentage jumps up to 2.4 percent. In essence, we're asking those that have less revenue to pay more of a share of their income than those who have more to give. The plan currently under debate in Montgomery would scrap the state sales tax on food, but it would leave counties and cities to continue to collecting those taxes. The plan would result in a loss of $300 million per year for the state, but that loss would be offset with the end of a state tax write-off for federal taxes.
These are budgetary hard times for the state, and we're well aware of that fact. Still, we cannot ask, due to fundamental principles of fairness and equity, for the poorest in our state to continue to bear this weight on the necessities of life. A tax on electronics, jewelry or construction supplies is one thing, but a tax on food is something entirely different. It won't wreck the state's already shaky finances, because we can forego a state income tax credit for our federal tax burden to pay for this relief.
A sales tax is already regressive and harmful. For reasons unconscionable to us, our forefathers established the current tax system as it is today. If this measure is adopted, we can correct some slight measure of that inherent unfairness.
The right to live should never be taxed.
Our View is the consensus of the CW editorial board.
By its nature, the sales tax is a regressive tax. Sure, on the surface, a sales tax looks fair. After all, it's just a tax on consumption - the more you buy, the more you pay. But look at the numbers. Let's compare someone that makes $25,000 with someone who makes $100,000 a year. Let's say they spend the same amount on essential foodstuffs per month, $500. After taxing that $500 at 10 percent, they owe $50 in sales taxes for the month.
Over the course of a year, their food taxes total $600. For the person making $100,000 a year, their tax burden is equal to .6 percent of their total income. For the person making $25,000, that percentage jumps up to 2.4 percent. In essence, we're asking those that have less revenue to pay more of a share of their income than those who have more to give. The plan currently under debate in Montgomery would scrap the state sales tax on food, but it would leave counties and cities to continue to collecting those taxes. The plan would result in a loss of $300 million per year for the state, but that loss would be offset with the end of a state tax write-off for federal taxes.
These are budgetary hard times for the state, and we're well aware of that fact. Still, we cannot ask, due to fundamental principles of fairness and equity, for the poorest in our state to continue to bear this weight on the necessities of life. A tax on electronics, jewelry or construction supplies is one thing, but a tax on food is something entirely different. It won't wreck the state's already shaky finances, because we can forego a state income tax credit for our federal tax burden to pay for this relief.
A sales tax is already regressive and harmful. For reasons unconscionable to us, our forefathers established the current tax system as it is today. If this measure is adopted, we can correct some slight measure of that inherent unfairness.
The right to live should never be taxed.
Our View is the consensus of the CW editorial board.
Viewing Comments 1 - 5 of 5
Michael G
posted 4/05/08 @ 5:55 AM CST
Pluses and minuses to your article but you are at least exploring the abusive tax systems not only in a lot of states but the federal punative, abusive, counter productive income tax system. (Continued…)
Jordan J
Jordan J
posted 4/05/08 @ 12:18 PM CST
It never fails. Anytime a newspaper has a section called "Our View," it's just an excuse to spew some more liberalism into the public. There are three major flawed liberal pretenses brought up by this article. (Continued…)
Enrique L. Rodriguez
posted 4/05/08 @ 2:21 PM CST
AFTER READING YOUR EDITORIAL, I CONCLUDED THAT YOUR MAIN CONCERN IS ALABAMA'S IMPLEMENTATION OF A CONSUMPTION TAX THAT WOULD BE UNFAIR TO THE POOR. IF YOU ARE INTERESTED IN FINDING OUT HOW A CONSUMPTION TAX CAN WORK IN THE STATE OF ALABAMA, WHITHOUT HURTING THE POOR, YOU SHOULD RESEARCH A FEDERAL BILL, THE FAIR TAX ACT OF 2007, HR. (Continued…)
Greg Michaelson
posted 4/05/08 @ 2:40 PM CST
That's the stupidest thing I've ever heard. The sales tax isn't regressive.
You show the person who makes $100,000/year, but only spends as much as the person making $25,000 year. (Continued…)
Art
posted 4/07/08 @ 9:48 AM CST
Your point is way off base. Have you ever seen I person who makes $100,000 spend like they only have $25,000? I don't think so! Most people spend more than they have; the result being they are in debt up to their eyeballs. (Continued…)
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