Gov. Bob Riley deserves a lot of credit for trying to do something about Alabama’s grossly unfair income tax structure. The fact that we begin assessing income tax on a family of four that earns as little as $4,600 is a tragedy. So the governor’s desire to fix it is admirable. Unfortunately in fixing one thing there is danger he is going to break something else—public education.
In the strange climate in which we live these days, seeking tax dollars for any purpose has come to represent some form of ultimate evil. It has almost become a mantra, a mindless chant that has no basis in reality. No taxes! No taxes! No taxes!
That kind of fiscal religion is fine if you live on Fantasy Island, but that is not where we live. We live in Alabama where we already pay less in state and local taxes than almost anywhere else in the country.
And we have the social services and public schools to show for it. Take a drive sometime into some of our poorer counties, where the full effect of our low taxes can be seen crumbling all around you.
Which brings us back to Gov. Riley’s plan to fix our tax system. Being a political realist, Riley knows the best way to get a tax break for anybody is to give a tax break to everybody. His proposal does just that. Unfortunately, when you cut taxes it reduces revenue. In this case it will cost the education budget $28 million a year.
Now don’t get me wrong, we really need to change our tax structure, and we really need to stop taxing the working poor in our state. It’s cruel and shameless.
But cutting revenue to public education is not a prudent way to fix this problem. We ease the burden on the poor with one hand, but diminish one of the critical institutions for solving poverty in the long run with the other hand.
There is a better way. Alabama Arise in conjunction with Rep. John Knight has put together a proposal which brings Alabama’s tax structure in line with the federal tax structure, especially in the area of the income-tax threshold—that is, the point at which working families begin to be assessed income tax.
In both the Riley plan and the Arise plan, the $4,600 threshold is removed. But in the Riley plan it is only moved to $15,000. That’s $15,000 for a family of four. I don’t know about you, but I think raising a family on that amount of money is going to be hard to do. Assessing state income tax on top of other life essentials is not going to help.
The Arise plan sets the threshold at $22,800 for a family of four. And the Arise plan is revenue neutral. That means it neither increases nor decreases state revenues. I guess sometimes holding your own is progress.
The tax cuts for the poor are offset by eliminating the deduction for federal income tax. Alabama is one of only three states that allow state taxpayers to deduct their full federal income tax. Eliminating this deduction allows us to raise the threshold while preserving education funding. Arise analysts point out that with their plan, three out of five Alabama tax payers pay less.
Listen, if something is broken, by all means let’s fix it. But let’s don’t break something else trying to get it done, especially when we know there is another way.
James L. Evans is pastor of Auburn First Baptist Church in Auburn, Ala.
James L. Evans is a retired Baptist preacher living in Alabama. Over 35 years, he served churches in Alabama, North Carolina and Virginia. In support of his pastoral work, Evans published 5 books including “First and Second Corinthians: Immersion Bible Studies” (Abingdon Press (2011).