Tax Reform

Taxes are a tool used to promote the common good. They provide the funding for education, child care, Medicaid, mental health care and other public infrastructure that improves everyone’s quality of life. But Alabama’s outdated tax structure fails to raise enough revenue to support these services, which holds our state back from realizing its full potential.

Alabama’s upside-down tax system also taxes many struggling families deeper into poverty. Low-income families pay twice the share of their income in state and local taxes on average that top earners do. Making that problem worse, Alabama is one of only three states with no tax break on groceries.

Arise has been a leading proponent of tax reform in Alabama for decades, and our analysis and advocacy were crucial in the enactment of a state income tax cut for families in poverty in 2006. Our research continues to show the range of benefits that Alabama would reap by untaxing groceries, ending large tax breaks for rich households and big corporations, and taking other steps to rebalance and modernize its tax system.

Fact Sheet

Out of step: Alabama’s unusual state tax system

Taxes are the tools that Americans use to pay for education, public health, transportation and other elements of the common good. But in Alabama, the tax system is upside down, with low- and middle-income people paying twice the share of their income in state and local taxes that the top 1 percent pay. This updated fact [...]
Issue
Tax Reform
Date
April 22, 2014
Author
Chris Sanders
Report

Earthquake on Goat Hill: How the Alabama Accountability Act passed and what it means

Alabama would provide income tax credits to help subsidize private or religious school tuition for parents of children zoned for "failing schools" beginning this fall if Gov. Robert Bentley signs the plan into law. The House and Senate approved the measure, known as the Alabama Accountability Act, mere hours after it was first introduced on Feb. [...]
Issues
Budgets, Tax Reform
Date
March 6, 2013
Author
Chris Sanders
Fact Sheet

Ending the state grocery tax and protecting schools

Alabama's tax system is upside down, and the state sales tax on groceries is one reason why. Alabama remains one of only two states -- the other is Mississippi -- with no tax break on groceries. Food costs consume a larger portion of the household budget for low-income families than for those who are better off, so [...]
Issue
Tax Reform
Date
March 13, 2012
Author
Alabama Arise
Fact Sheet

A tax on survival: Grocery tax policies in America

Food takes a much bigger bite out of the household budget for low-income families than for richer ones, and sales taxes on groceries thus hit harder at lower incomes. In recognition of this fact, most states either have exempted groceries from state sales taxes entirely or have devised ways to help offset grocery taxes for low-income [...]
Issue
Tax Reform
Date
June 24, 2011
Author
Chris Sanders
Fact Sheet

Teamwork for the common good

If you talk to a low-income Alabamian about the state's tax system, you're liable to hear two things. One is a boast that the state has some of the nation's lowest taxes. The other is a complaint that, nevertheless, the person pays too much in taxes. The statements may sound contradictory, but both are grounded in [...]
Issue
Tax Reform
Date
May 27, 2011
Author
Alabama Arise
Fact Sheet

A sense of scale: Small businesses in Alabama

Lawmakers often debate how a bill would affect small businesses, but no single official definition of "small business" exists. What are small businesses, anyway? How are they taxed in Alabama? And do small businesses survive or fail because of taxes, or do other factors play larger roles? This fact sheet answers these questions and more.
Issue
Tax Reform
Date
July 20, 2010
Author
Chris Sanders
Fact Sheet

Big piece of a small pie: Alabama’s tax paradox

If you talk to a low-income Alabamian about the state's tax system, you're liable to hear two things. One is a boast that the state has some of the nation's lowest taxes. The other is a complaint that, nevertheless, the person pays too much in taxes. The statements may sound contradictory, but both are grounded in [...]
Issue
Tax Reform
Date
February 16, 2010
Author
Chris Sanders
All Issue Resources