Published on Monday, August 25, 2003 by the Seattle Post-Intelligencer
Alabama Tax Plan Causes Unholy Outrage
by Neal Peirce
Who would Jesus tax? How much of a burden would he lay on the poor? How about the rich and big corporations?
Alabama voters will face that kind of issue on Sept. 9 — an explosive proposal to reform America's most regressive tax system, long skewed to protect affluent individuals and the state's "Big Mules" — powerful timber and farm interests.
There's no other state where a family of three or four pays tax on income of as little as $4,600 a year. Last year the lowest-earning one-fifth of Alabama taxpayers paid 10.3 percent of their incomes in state and local levies. But the richest 1 percent paid just 3.7 percent.
Enter Alabama's Republican Gov. Bob Riley, a staunchly conservative former congressman of the Newt Gingrich school who hosts Bible classes at the state Capitol in Montgomery. Confronted with a $675 million budget deficit, Riley revolted. Cutting that deeply, he feared, would trigger a "catastrophic failure of government" in a state already in the national cellar of per-capita spending for education and other basic services.
But Riley went a lot further than suggesting tax hikes to cover the deficit. He recommended a massive "tax and accountability" plan increasing taxes by $1.2 billion over five years, eight times the largest increase ever before enacted in Alabama. Many of the new funds would be targeted to habitually underfunded and underperforming public schools, accompanied by measures to thin out incompetent teachers and better prepare Alabama residents for a competitive 21st-century economy.
But in the process Riley proposed giving the poor a huge break — no income taxes at all below $20,000 in income.
"I've spent a lot of time reading the New Testament," said Riley, "and it has three philosophies: Love God, love each other, and take care of the least among you. It is immoral to charge somebody making $5,000 a year an income tax."
Under Riley's proposal, just the top third of income earners, plus corporations and large farm and timber operations, would pay more taxes. The state's lowest-in-the-nation property taxes would rise moderately. Alabama would rise from 50th to 44th in total state and local per-capita taxes.
Alabama's mainstream religious denominations are backing Riley. Eight former presidents of the Alabama Baptist State Convention recently declared his plan will end unfair taxation, "bringing relief and justice to the poor who are our neighbors." Many mainstream business groups, including insurance, utility, banking and consumer-product firms, back the measure as a way to boost education and sharpen work-force skills.
But a number of independent Christian congregations — not to mention the Alabama chapter of the American Christian Coalition — are against the measure. Anti-tax groups are bitterly opposed. In a topsy-turvy political landscape, the state's Republican Party is opposed, while the Democratic Party is in favor.
Polls show the revenue measure, which the state constitution mandates must go to popular vote, trailing by about 20 points. That's partly because low-income and black voters, who'd benefit the most, remain largely opposed — reflecting their suspicion of the Montgomery political establishment they believe has invariably scorned and disserved them. Timber and other corporate interests opposing the measure are financing television ads aimed at exploiting less-educated people's fears.
Meanwhile, such groups as the National Taxpayers Union and Eagle Forum are mobilizing in opposition, fearing their nationwide anti-tax message will be muddied. Grover Norquist, president of Americans for Tax Reform, wants "to make Riley the poster child for Republicans who go bad. I want every conservative Republican elected official in the United States to watch Bob Riley lose and learn from it."
What is certain is that gross unfairness in state tax systems, the affluent and powerful benefiting at the expense of the poor, is hardly restricted to Alabama. In fact, 46 of the 50 states take a much larger share of income from lower- and middle-income families than they do from wealthy citizens.
Last year, the lowest-earning 20 percent of Americans had an average state and local tax rate of 9.6 percent — almost twice the 5.2 percent paid by the richest 1 percent of Americans. The figures, which count in the benefit from deducting state and local taxes from individuals' federal tax returns, were calculated by the Institute on Taxation and Economic Policy. They actually show the state and local systems have become even more regressive in the last decade.
So next month's referendum outcome in 90 percent Christian Alabama may have far-reaching national implications. A Riley win could lead to spirited re-examination of state and local tax systems, on moral and religious grounds.
If Riley loses, on the other hand, we'll have pretty convincing proof that for all the moral high ground Christians claim, in a showdown they open themselves to criticism that they hate taxes more than they love Jesus.
Copyright © 2003 The Seattle Times Company