Take more home a tax cut for all
Johnny Mack Morrow
As you shopped for your Thanksgiving turkey and all the trimmings that go along with it, you probably noticed that the cost of groceries in Alabama is continuing to rise.
In fact, the cost of groceries in Alabama has gone up over 15.6% over the last four years.
All Alabamians are being hurt every week at the grocery store, not just during the holidays.
Buying essential items like milk and bread is putting the squeeze on families' budgets.
Alabama is one of only two states in America that makes people pay sales taxes on groceries. All Alabamians pay four percent to put food on the table.
That means that $320 million dollars go to Montgomery each year that should stay in people's pockets.
In the tough economic times we are currently facing, now is the time to give Alabama taxpayers a tax cut.
The Alabama House Democratic Caucus has made the elimination of the tax on groceries a top priority in the upcoming legislative session that starts in February.
Rep. John Knight has been championing this legislation for several years, and it passed the House last year, only to see it die in the Senate.
With family budgets getting tighter and the employment situation as uncertain as it is, the time is right to eliminate tax.
Eliminating the sales tax on groceries will be an estimated $320 million tax break that all Alabamians will enjoy.
Removing a portion of the taxpayers' ability to deduct their federal income taxes on their state returns will make up the loss in revenue to the state's education budget.
Alabama, Iowa, and Louisiana are the only states that give a full deduction for federal income taxes.
Alabama and Mississippi are the only two states that fully tax groceries at the same time.
Do you see the pattern?
Alabama's sales taxes are 34 percent higher than the national average as a share of income.
Alabama taxes a bigger portion of income on families making less, and those making more pay less. For those in the top one percent of the income bracket, Alabama has the third lowest taxes in the nation.
For the poorest families in the bottom 20 percent of income, Alabama has the third highest in the nation.
That is why a majority, a vast majority, of families in Alabama will see a tax cut under the Knight plan.
The federal income tax loophole costs the state of Alabama $550 million a year. More than 80 percent of this current tax deduction goes to the wealthiest 20 percent of Alabamians.
Even eliminating a portion of this deduction will offset eliminating the grocery tax and protect schools.
If the Knight bill passes and becomes law, Alabama will still have the lowest taxes in the nation overall.
Not only that, it's an important step to make it easier for families in tough economic times.
Johnny Mack Morrow is a state representative for Franklin County. His column appears each Wednesday.