That’s what it means to repeal the 4 cents Alabamians pay the state in sales tax on groceries and over the counter medicine. It would mean a break on every dollar families spend to put food on the table.
Yet when state Rep. John Knight, D-Montgomery, raises the issue each legislative session, it succumbs to an untimely death. Why? Because to pay for it, it would eliminate the state tax deduction for federal income tax on single filers making $150,000 and joint filers making more than $300,000.
That’s lawmakers favoring four percent of the people in Alabama, leaving 96 percent without relief they could use so the wealthiest can take advantage of a tax deduction. And it leaves Alabama as only one of two states in the country that still charges tax on groceries.
It is unconscionable that a bill that would offer such widespread relief continues to hit roadblocks once it arrives in Montgomery, but this state’s leaders seem to put more emphasis on gambling under the guise of calling it a tax on the poor rather than taking a chance on actually helping poorer citizens.
The bill has been introduced once again, and it is hoped that this time around — especially in these economic times — lawmakers realize just how critical it could be in serving the people of this state.
You go so far as to embrace as your own Rep. Knight's seething disdain for all those rich people who hate poor people. Good theater. Erroneous, misleading information for your readers.
You got played.
First of all, regardless of what Rep. Knight told you is in House Bill 1--his proposal to amend the state constitution to limit state income tax deductions for federal income taxes and exempt food from state sales tax--the following link will to take you to the actual HB 1 that is currently pending action in the House Education Appropriations Committee:
http://alisondb.legislature.state.al.us/acas/ACTIONViewFrame.asp TYPE=Instrument&INST=HB1&DOCPATH = searchableinstruments/2010RS/ Printfiles/ &PHYDOCPATH =//alisondb/acas/searchable instruments/2010RS/PrintFiles/&DOCNAMES=HB1-int. pdf
You'll discover that, in Knight's bill, only individuals making less than $50,000 and couples making less than $100,000 would remain eligible for an unlimited deduction on federal income taxes paid. Everyone else's deduction would be limited. Everyone else would have a higher state
income tax bill (i.e., tax increase).
By the way, exempting food from state sales tax doesn't help Alabama's poorest residents at all. Food Stamps are available to them. And food purchased with Food Stamps is already exempt from state sales tax.
In reality, the only Alabamians who would benefit from this bill are those with incomes too high to qualify for Food Stamps but still low
enough to avoid being hit with a limited deduction on federal income taxes. The benefit? At best, a $100 to $200 savings on their annual grocery bill. Do the math yourself. Don't rely on their figures. According to the U.S. Bureau of Labor Statistics, an average family of four spends a little less than 10 percent of its disposable yearly income on food. Therefore, a family with $40,000 in disposable income, spends about $4,000 a year on food. The state sales tax on food is .04 percent. Elimination of the state sales tax on food would save that family $160 a year.
For everyone else, any savings realized by
exempting food from state sales tax would be cancelled out--and then some--by the higher state income tax they'd have to pay as a result of the limited federal income tax deduction.
Something else. Currently, revenue generated from the state sales tax on food is earmarked for education. While Rep. Knight and Alabama Arise and the rest are always quick to imply that revenue generated from the federal tax deduction limits will replace that funding to education, there isn't a single word in the bill earmarking it to be used for that purpose. In other words, education gets screwed anyway.
The food tax exemption part of Knight's bill is a red herring plain and simple. He's a smart guy. He knows it's not going to help Alabama's poor. But he also knows that, if he can get our attention sufficiently trained on his deceptive rhetoric declaring what a wonderful thing it would be, then he has a shot to accomplish what he has long acknowledged he wants to accomplish:
Make all those "scheming" businesses and rich people pay more state taxes. He'll tell you it's because the current tax system favors the rich at the expense of the poor...and that limiting or eliminating their federal tax deduction would make things fairer. Really? Currently, for each and every Alabama taxpayer, his/her state income deduction for federal income taxes is based on how much federal income taxes he/she paid...and the amount of his/her federal income taxes is determined by his/her income. Unfair?
Even if you do side with Rep. Robinhood, now is not the time to impose federal income tax deduction limitations on any Alabamians.
Employers are already reeling from a chaotic economy and already being looked to as cash cows for dubious national policy initiatives. Many
businesses—especially smaller ones—wouldn’t survive another hit.
The bottom line is that Rep. Knight's bill would not only not help Alabama’s working families, it just might cost many of them their jobs.
There's a reason that this legislation--in all of its various forms--fails to pass year after year. It's bad legislation. Bad for Alabama. Bad for all Alabamians.
Shame on Rep. Knight for trying to work this same
wolf-in-sheep's-clothing con on the public again. And shame on you for being duped into giving him the forum to do it.
Your editorial deceived your readers. You owe them a do-over.