For those that reside outside of Alabama, it might come as a big surprise that our state is only one of two left that fully tax food. The neighboring State of Mississippi as you can see is the other. This has been a debate waged in our State for some time. I suppose the rationale is that Alabama has some of the lowest property taxes in the country and needs to make up revenue somehow. Advocates for the poor argue that this food tax structure is extremely regressive and needs to be repealed.
IMHO - A food tax on necessities should definitely be repealed. However, I think that an excise tax on such extras like soda, potato chips and other junk food could be a reasonable solution to making up for some of the revenue lost. The property tax situation should surely be fixed, but I'm just not sure that it will pass the Legislature based on the current landscape. Large corporations and timber companies fail to pay their fair share and that should certainly be considered.
Let me just make a quick point - This is not the repeal of a tax that would unfairly penalize anyone. I know that at this site we can probably agree that the rich should pay more taxes, but I think it's important to show that this doesn't even affect the rich adversely. Everyone buys groceries whether rich or poor. It's just more critical for those that struggle daily to put milk and bread on the table.
The most recent proposed bill to repeal the grocery tax failed to make it out of the State Legislature this year. The session ends this week so its all but dead for the time being.
However, the two leading Democratic Gubernatorial candidates, Artur Davis and Ron Sparks, have been especially vocal this week with their thoughts on repealing this food tax and how to make up the revenue.
The Legislature shelved the tax measure earlier this month. Alabama and Mississippi remain the only states that fully tax food.
Sparks also expressed support for repealing the food tax, as well as paying for that lost revenue with taxes on gambling and out-of-state corporations who work in Alabama.
Davis used the news conference to criticize the Alabama's income tax structure, which he said is the "most regressive" of any state. He said individuals start paying state income tax at $8,800 in income and families of four start at $13,500.
There certainly are some disagreements between the two candidates on how to supplementing the lost revenue. While the Governor can introduce a plan and promote it, ultimately the 2011 Alabama State Legislature will have the ultimate responsibility of pushing this plan through. Highly unlikely as it appears the Democrats are going to have trouble retaining control of the State Legislature. So for now, it's another issue that is going to have to be pushed by the people and enough awareness raised for this to get the attention that it so rightfully deserves.
For more information study on taxing sale of food