Most states define their income tax in statutory law allowing their state legislature to make adjustments in the tax code. In Alabama, our income, property, and most other tax laws are written into the constitution, requiring a statewide vote of the people to make changes.
Because it is so difficult to make adjustments, what was once a well thought-out, progressive tax code, when it was written 73 years, is now a regressive, inadequate system for the 21st century.
Alabama has what experts call an Upside-Down Tax System. That is, the taxes are set up to get the most from the people who have the least, and the least from those who have the most. Low-income families pay more than ten percent of their income in state and local taxes, while the wealthiest families pay less than four percent of their income. Sales and grocery taxes hit average people the most – while an out of whack income-tax lets the wealthy pay very little. Turning the tax code right-side-up would make more sense.
Tax reform is a children’s issue because taxes and the programs they fund directly impact child well-being. The tax system directly affects a family’s economic security and in our state contributes to keeping families in poverty. An inadequate system also fails to generate revenues for proven programs that can improve child well-being. VOICES supports tax reform that is reliable, efficient, fair, and provides adequate funding for all programs that benefit children.
NEW Information on Grocery Tax Amendment
Read Faulty Foundations Tax Policy Document
Center for Budget and Policy Priorities
Economic Policy Institute
Citizens for Tax Justice