MONTGOMERY, Ala. (WIAT) — While Alabama’s food tax helps fund the state’s education budget, it’s harder for some families to put food on the table. That’s especially true now that consumer prices jumped 7% last year, the biggest increase since 1981.
“As groceries keep getting more expensive, there’s never been a time more than now when we probably need to think about it,” said Parker Snider, director of policy analysis at the Alabama Policy Institute.
Snider says past efforts to eliminate the tax have been met with resistance because the money helps pay for schools. API supports Rep. Mike Holmes’ (R-Wetumpka) bill to reduce the tax without offsetting the roughly $500 million it generates.
Holmes says Alabama is financially in a good position to make the move.
“We’re very successful, I guess. We’re growing up, and we’ve paid off a bunch of debt and we’ve got a lot of money to spend and I’m saying why not give people a break,” Holmes said.
Sen. Andrew Jones’ plan would reduce taxes and offset lost income by capping the amount of federal income tax that can be deducted from state returns.
“If you make about $70,000 as an individual, $140,000 as a married couple, you’ll still get the full deduction of your federal income tax payment, and everyone else won’t get any income tax. ‘State on groceries,’ Jones said.
Alabama Arise, a nonprofit that advocates for people experiencing poverty, supports Jones’ bill.
“We have done polls which we will publish tomorrow. This shows that the majority of Alabamians would be willing to raise income taxes if it meant we could lower our food tax,” said Robyn Hyden, executive director of Alabama Arise.
Hyden says a 4% tax is equivalent to about two weeks worth of groceries for a family.
“We take this food from starving families. That could be around $500 for some families. They deserve to have that money to use to feed their children,” Hyden said.
Even if these bills were passed, they would not eliminate taxes on food products entirely. Counties and localities can still impose their own taxes.
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