Insight

Sweet home anti-tax and impoverished Alabama

By David G. Bronner
Special to The Star
08-24-2003

Less than three weeks before Alabamians will vote on Gov. Riley’s Plan for Progress, I am left scratching my head and wondering why low- and middle-income Alabamians would vote against this plan! Yet, a recent poll shows that 58 percent of surveyed voters in households earning less than $30,000 a year plan to do just that. Recently, a retiree who I had asked to vote for the plan, and who never made more than $14,000 a year, told me to “Go to Hell.” Personally, I have higher ambitions than that, but it is ironic that these are the same people this plan would benefit the most. Unfortunately, at the mention of “new taxes,” they stick their heads in the sand without realizing the benefits they will receive. Maybe those who can read this will make a special effort to help others, including the 25 percent of functionally illiterate Alabamians, to understand how the plan helps the majority of Alabamians. Low- and middle-income families in Alabama pay a far higher share of their income in state and local taxes than do the rich. In fact, Alabama’s tax system is on the list of the “Terrible Ten” most regressive state systems in the nation. Alabamians in the bottom 20 percent of the income scale, as well as middle-income families, pay more than twice as great a share of their earnings in taxes as do the rich. Clearly, Alabama’s present tax system is extremely unfair. Under Riley’s plan, this would change! The Riley plan clearly helps our seniors, our kids, and all those earning less than $40,000. While the tax reform plan is extremely complex and involves a broad spectrum of change, the bottom line is clear. It helps shift the heavy burden from poorer Alabamians to those who are more able to pay their share. At the same time, it improves public services to all citizens, especially the children, elderly and less fortunate. According to the U.S. Census Bureau, the median household income in Alabama is $34,135. Under Riley’s plan, a married couple with two children earning $30,000 a year would save $277 in state taxes. Those making less than $20,000 would receive an even larger break because the plan raises the threshold for paying any income tax over the next four years to $20,000. In addition, Alabamians would receive numerous enhanced benefits from state services, including college scholarships programs, reading programs and other critical government services that could transform the state’s education system into a national leader. By voting YES on Sept. 9, Alabamians have the unique opportunity to continue much needed services such as hot meals for senior citizens, while increasing accountability standards for our state government. However, if the plan fails, the Gov. has stated that he would be forced to drastically cut state service in order to cover the projected $675 million budget deficit. The current levels of services of state government are so minimal that big cuts in troopers, health care workers and others will render these services nearly useless. After years of Alabama being ranked at the bottom for all indicators of quality of life, Governor Riley has finally done something positive to improve the quality of life in this state. Inheriting one of the nation’s most regressive tax systems, as well as a state in deep financial trouble, he has courageously pushed a tax reform package through the Alabama Legislature. Now, the outcome is up to the people of Alabama who can choose to either move forward or regress to the 19th Century. A YES vote will bring forth progress. A NO vote would cause this state to spiral downward. We need to live in the future and not the past. We teach our children to do the right thing. We now have the opportunity to teach by example and be the good citizen that we have urged our children to be. I trust Governor Riley and I ask you to follow his leadership and give us the chance to improve this wonderful state. Do the right thing. Vote YES on September 9. David Bronner is chief executive officer of the Retirement Systems of Alabama.