Alabama Taxes

By: Associated Press
By: Associated Press

A Washington think tank says Alabama's tax system has a number of flaws that will make it difficult to pay for state services in future years, even if the economy remains strong.

The study by the Center on Budget and Policy Priorities ranks Alabama as one of 18 states with tax systems that are considered at high risk.

Problems with Alabama's tax system include an over-reliance on the sales tax, an income tax system that punishes the poor and goes easy on the rich, and tax breaks given to elderly citizens, even when they have high incomes.

The study also says that Alabama's heavy reliance on the sales tax to fund education could cost the state in future years as more people turn to the Internet to do their shopping. Customers do not pay sales tax on many Internet sales.

The study is critical of Alabama's income tax, which begins taxing a family four with an annual income of four-thousand-600 dollars, the lowest threshold in the country.

A recent survey by Auburn University's Ask Alabama poll concluded that most Alabama residents are concerned with the problem of recurring shortfalls in the state budgets, but also believe that taxes are too high or at the right level.


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