Alabama Tax Cut

Gov. Bob Riley and house budget committee chairman John Knight say they are trying to reach an agreement on an income tax cut and both men are optimistic.

Currently, Alabama requires a family of 4 to start paying state income tax on earnings of $4,600 a year.

Alabama is the only state with an income tax threshold for a family of four below $10,000.

Riley has proposed raising that threshold over 5-years to $15,000 by increasing the standard deduction and personal and dependent exemptions.

Riley's plan would give every taxpayer a tax cut and would cost $233 million a year.

Knight's plan would increase the threshold for a family of four to $22,800 in 2007.

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