Inflation, Gas & Grocery Taxes

Inflation is the top concern of most Americans and especially Alabamians. Everyone is paying more at the pumps and at the stores, and the ability of many to realize the American dream of home ownership is slipping away. The politicians in Washington and Montgomery have continued their reckless tax and spending sprees and must be reined in and held accountable to the voters.

The Alabama Gas Tax of 2019 increased taxes by 10 cents per gallon and was voted in with the help of the incumbent District 3 Senator, along with almost every other Montgomery politician. This represents yet another tax, not authorized by the citizens but resulting in a substantial monetary impact on all Alabamians. This type of tax increase is a prime example of a regressive tax, which impacts low-income and middle-income families, with virtually no impact on high-income families. While there is a legitimate case for improving Alabama’s roads and highways there are other ways to achieve this increase in revenue.

Alabama is one of the few remaining states to impose a grocery tax on its citizens, which is yet another regressive tax impacting lower-income and middle-income families. Alabama is one of only 5 states in the U.S. that mandates the full sales tax rate (4%) against groceries. Repeated efforts to repeal these taxes have failed and have contributed greatly to the misery-index of many Alabamians. This is a tax which is a prime candidate for reduction, and possibly elimination. Other taxes/tariffs on goods/products can remain in place and be adjusted appropriately to account for the loss of tax revenues from groceries.

While Alabama currently limits income tax to a maximum of 5%, our neighbors to the east (Georgia) maintain a 5.75% maximum on high wage earners. This change would provide additional revenues while keeping Alabama’s tax rate in the lower end of the country by comparison.

Other changes should be made in the area of user fees such as state parks. Rather than the recent increase in the state’s authorized bond levels to keep parks maintained (which is still just a hidden tax to be paid by future generations), the users of park facilities should be asked to provide a greater share of the costs incurred to maintain recreational areas. If this reduces the number of users, it would also reduce the maintenance costs for each park. The above shifts in the tax/fee burden would only slightly impact a segment of the population which would be able to handle it with less impact.