MONTGOMERY,
Ala. (AP) — A new national study shows Alabama levies more income tax than any other state on a family of four living
at the federal poverty line.
A
mom, dad and two children making $21,203 annually in Alabama pay $423 in state income tax.
If
the family moved across the state line to Mississippi, they would pay $48.
The study by the nonpartisan Center on Budget and Policy Priorities in
Washington also says Alabama still has one of the nation's lowest thresholds for paying income taxes, despite raising the
threshold significantly in 2007 to help the working poor.
The
Alabama Citizens' Policy Project, a Montgomery group that works on behalf of Alabama's poor, said the study raises concerns
that Alabama's tax structure is sending the poor even deeper into poverty.
"Alabama
is still requiring hundreds of dollars a year from families who are struggling to keep their heads above water," said Kimble
Forrister, the project's executive director.
The
study, based on 2007 figures, says Alabama was one of 18 states that levied an income tax on a family of four making less
than the federal poverty level.
In
Alabama, the family of four paid $423, followed by $409 in Hawaii, $325 in Oregon and $258 in West Virginia.
Illinois,
Indiana, Iowa, Michigan and Montana also required a family of four living at the poverty line to pay more than $200 in state
income tax, the study said.
Alabama
used to have the nation's lowest threshold for requiring a family of four to start paying state income taxes. But in 2006,
the governor and Legislature worked together to raise the threshold from $4,600 to $12,600, starting with the 2007 tax year.
That dropped Alabama to third behind West Virginia and Montana.
Alabama
was one of 13 states that took steps in 2007 to reduce its taxes on the poor.
"Progress is occurring slowly, but states increasingly realize that taxing
people deeper into poverty is counter-productive," study co-author Jason Levitis said.
In the spring, the Alabama Legislature fell one vote shy of passing more tax cuts for low-income citizens and
removing the state sales tax on groceries. The proposal passed the House, but failed in the Senate in a partisan dispute
Many Democrats wanted to replace the lost income tax revenue by eliminating Alabama's income tax
deduction for federal income taxes paid. That deduction primarily benefits higher income taxpayers. Many Republicans, including
Gov. Bob Riley, opposed raising taxes on anyone.
If the plan had passed the Legislature, it would still have needed voter approval in a statewide referendum
to take effect.
The sponsor of the tax plan, Rep. John Knight, D-Montgomery, said he will try again when the Legislature returns
in February.
"It is just morally wrong to have basically the lowest income tax threshold and the highest tax on poor people
in the nation," Knight said.
Tara Hutchison, the governor's press secretary, said Riley has pushed for tax cuts, but the Democrat-controlled
Legislature "refuses to take action."
Knight said he has met with some business interests in recent months to discuss the tax situation, but the sticking
point remains whether to require wealthier Alabamians to pay more in order to replace the revenue lost by cutting taxes on
the poor.
