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About those Alabama Taxes ...

by: mooncat

Thu Aug 12, 2010 at 11:00:00 AM CDT


First off, as noted earlier this week, Alabama is second from the bottom in taxes per capita.  And we would be first except South Carolina's economy fell off a bigger cliff than ours did.

As the Birmingham News points out, our taxes don't feel like the second lowest in the nation, because the Alabama tax structure is so unfair:

The bottom 80 percent of taxpayers in Alabama, who earn up to $78,000 a year, pay more than twice the percentage of their incomes in state and local taxes than do the top 1 percent of income earners. Those top earners, with an average yearly income of almost $1.2 million, pay 4 percent of that income in state and local taxes. The lowest 20 percent of earners (average income $10,400) pay 10.2 percent; the second lowest 20 percent (average income $21,000) pay 10.5 percent; the middle 20 percent (average income $34,600) pay 9.5 percent; and the fourth 20 percent (average income $59,300) pay 8.2 percent of their incomes. 

What's the problem with low taxes?  Low taxes buy us low services.  Here's the argument from a Christian perspective:

Maybe it's time for us to look at what is in our best interest and then put people in office who are willing to make it happen. Then we must have the resolve to pay for those things that will make our society a blessing not just for some of us, but all of us.

Do we want to be like a third world country, or not?  Because that's where we're headed, and the only thing keeping us afloat now is federal largesse.

mooncat :: About those Alabama Taxes ...

Our property tax structure is a big part of the problem -- property taxes are kept artificially low requiring high regressive sales and income taxes.  Big landowners benefit from that arrangement.  Who are these big landowners? Kristopher caught this little nugget:

Alabama is the state with the 5th largest landholdings by foreigners.  Alabama has more foreign-owned acreage than California, which is 3 times as big. Over 1.4 million acres (about 5.1%) of Alabama land is foreign-owned.

Why does land ownership matter?  Out of state owners care only about keeping taxes low, not about providing services, basic or otherwise -- they don't live here, after all!  Susan Pace Hamill found that 71% of Alabama property is classed as timber but it pays about $1 per acre -- less than 2% or property taxes.  Earlier this year a gubernatorial candidate was talking about this issue promising to raise the property taxes owed by the giant, out of state corporations who own so much of our timber lands.  I never understood why progressive Alabamians and other candidates didn't glom onto that proposal -- out of state timber owners can't vote -- but it's good to hear other folks begin to argue that further cutting taxes is not the answer. 

Alabama taxes are already low in absolute terms, butwe need to distribute the tax burden more fairly so as not to crush the least fortunate.

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That candidate was Artur Davis. (4.00 / 2)
Ron Sparks commented on it, but he made it clear that he was strictly against it.

Bingo! (4.00 / 1)
And, imho, Alabama Democrats missed an opportunity to actually become progressive reformers.  Those of us who care about tax fairness, honest and open government, and a rational constitution need to keep breaking ground because we obviously need to plant more acreage before we can harvest a progressive agenda in Alabama.

Work harder and work smarter!

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