What is expected to be a compressed legislative session continued today, with the only constitutionally required job for lawmakers up front and center: budgets.
Alabama ARISE is out with a policy paper predicting the loss of revenue for the state could reach a staggering $3-Billion next year.
ARISE has long called for eliminating the sales tax on food and that is part of their proposed solution to the revenue loss from Covid19:
Eliminate the state sales tax on groceries and replace that revenue by making progressive improvements to our income tax system. Alabama is one of only three states with no tax break on groceries.
There are a half dozen other proposals, and yes, they call for increased taxes, with some of the proposed increases being temporary:
- Eliminate the regressive, and expensive, state income tax deduction for federal income taxes. About 80% of the $782 million deduction’s benefit flows to the top 20% of households.
- Increase income tax brackets so the highest-paid 25% of taxpayers have a higher tax rate than people in the lower and middle brackets do. Alabama’s top income tax rate kicks in at just $3,000 of taxable income.
- Impose a temporary income surtax on millionaires during the financial crisis.
- Adopt combined reporting to prevent corporate tax avoidance while rejecting proposals, such as moving to a single sales factor formula, that would reduce taxes for large corporations.
- Apply sales and use taxes to more professional services and digital goods and services like music downloads and video streaming services.
- Institute or increase sales and excise taxes on unhealthy items like tobacco, vaping products or sugary soft drinks. The state could dedicate this money to Medicaid and other health care services.
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