Legislation should help the poor

Published 12:00 am Friday, February 3, 2006

“What do you think of the Gov. Riley Tax Bill?” asked the reporter.

“It has potential,” I said.

“I have not read it, but it has potential.”

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My favorable impression had been birthed in a brief conversation with Gov. Bob Riley and Finance Director Jim Main the day before the session started.

They had given me a summary, but not the bill.

I liked what they presented.

Even though I had not read the bill, I was proud that it tackled one of Alabama’s most shameful realities: collecting income tax from its citizens starting at $90 per week or $4,600 per year.

The federal government and most states start at $400-$500 per week or $20,000-$22,000 per year. No state comes close to Alabama’s abysmally low threshold of $4,600.

The bottom fifth of Alabama citizens pay 10.6 percent of their income in state and local taxes.

The top 1 percent pay 3.8 percent.

It ought to be just the opposite.

Its tax deform at its worst.

No other state is as bad.

I was just so glad Gov. Riley was tackling this shameful blight on the least of these.

Then I began to examine the tax proposal more closely.

When I examined it the first red flag was the price tag: $233 million dollars a year when fully implemented.

I had thought it was $233 million over five years.

I immediately knew we could not take that much from the Education Trust Fund every year and adequately educate our children.

I had also assumed that the proposal just helped the poor taxpayers.

Then I heard Gov. Riley say that it would give every Alabamian a tax cut.

I looked even more closely, for Alabama’s rich do not need or deserve a tax cut at the expense of children.

The tax rate for Alabama’s poor is the highest in the 50 states. The tax rate for Alabama’s rich is the second lowest in the 50 states.

There is absolutely no reason to raid the Education Trust Fund to lower the second lowest tax rate for the rich. No reason at all but election-year politics.

Then I looked closer. The proposal helps the poor, but most of the tax-cut dollars go to those who are not poor.

In the name of helping the poor, it helps those who are not poor more.

It also hurts the poor by taking much needed funding from public education.

In short, Gov. Riley’s Plan robs the poor in the name of helping the poor. What it gives with the right hand, it takes with the left.

Sometimes we can’t win for losing.

Finally, the Governor’s proposal will eventually start requiring the poor to pay taxes at $15,000, which is considerably less than the Federal Government and other states.

In addition, it takes five years to be fully implemented.

Too little results, too long to get there.

In a Senate Democratic Caucus meeting, Sen. Lowell Barron was adamant: “We need to help the poor,” he said.

“We cannot afford otherwise.”

I began to look for other alternatives.

Rep. John Knight has a proposal, but it raises taxes on some as it lowers it on most.

Sen. Roger Bedford has a different proposal, but it does the same thing.

Neither are unfair, but each must pass by a constitutional amendment which must have a 3/5 vote in each house of the Alabama Legislature and a majority vote of the people. This is a sharp mountain to climb.

I had to look harder.

I met with Joyce Bigbee, Norris Green, Kelly Butler, Gene Murphree and others of the Legislative fiscal Office (LFO).

I said, “I need a proposal that does the following: (1) raises the level at which poor folks start paying taxes near the national average; (2) neither raises nor lowers the taxes of others; and (3) costs no more than half as much as Gov. Riley’s $233 million per year proposal.”

It was a tall order, but this a cracker jack team.

In a few days, they provided a proposal: a non-refundable earned income tax credit.

It’s not sexy like a tax cut, but it prevents the poor family of four from paying taxes until their income reaches $18,000 per year. When it is fully phased in, it will cost no more than $118 million per year, greatly reducing the adverse impact on the Education Trust Fund.

It can be phased in over three years rather than the five proposed by the governor.

And, it does not raise or lower the tax on the rich and other taxpayers.

I will ask Gov. Riley, Rep. John Knight and Sen. Roger Bedford to join me in supporting this proposal or forging a better one.

We need to work together to help the poor.

This proposal will not be easy to pass because is not sexy, it is too fair and it makes too much sense.

We still have to fight for it and hope fairness reaches the victory circle.

However, I have more than hope, I have faith, and faith moves mountains.