Alabama, according to an article in the July edition of the Retirement Systems of Alabama newsletter, is very high on the list of states in taxing poor folks. Based on information from Charles B. Stockdale of the 24/7 Wall Street web site, Alabama collects an income tax of $548 annually from a family of four living at the poverty line. In fact, even a single-parent family of three in Alabama making a mere $9,800 per year would be subject to the state income tax.
The RSA newsletter said that the 24/7 Wall Street site, a non-partisan group based in Washington, collected the data on state taxes by examining a new report from the Center on Budget and Policy Priorities. That Washington-based group focuses on issues affecting low-income Americans. Alabama’s poverty rate is the nation’s seventh-highest, at just over 17% of its population, according to the RSA. Most states steer away from taxes on the working poor, so as to help families try to climb out of poverty.
But 15 states continue to tax families with incomes at or below the official federal poverty line of $23,018. It’s high time that Alabama reforms its tax code and that reform must include changing our policy of taxing poor people. The regressive tax structure in our state not only hurts the poor, it keeps Alabama from progressing both economically and socially.
Source: RSA Newsletter
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