“We unfairly tax the poor more than we do the rich. So the less you make, the more that you have to pay in our tax system. It’s just a regressive tax system.'
Alabama has some of the nation’s highest percentages of households struggling to afford everyday expenses, according to new data from the U.S. Census Bureau., which collected data from Aug. 20 to Sept. 16, 2024, shows 41% of households in Alabama said they had a somewhat difficult or very difficult time in the week leading up to the survey. Only Kentucky and Wyoming ranked worse than Alabama, at 43% each.
Alabama remains one of the few states where groceries are subject to a sales tax, which advocates say further strains household budgets. Until lawmakers in 2023, the combined state and local sales tax meant some municipalities charged up to 10% tax on groceries. The 2023 tax cut included another provision to cut the state grocery tax an additional 1% depending on sales tax growth, but advocates argue it is insufficient.
“Instead of putting most of that money back into government, we think that that money should be returned to the people of Alabama through lower tax rates,” he said, adding that a period of surplus revenue provides an opportunity to make tax cuts without compromising funding for public services. “There’s a lot of reasons why Alabama is struggling financially, number one because of our tax system and how we tax the poor, and because we do have a regressive tax system,” Jones said.
State officials have tended to prefer a workforce-centered approach, particularly in raising the state’s workforce participation rate. The number stood atin September, according to the Federal Reserve Bank of St. Louis, one of the lowest in the nation. Alabama’s rate has been lower than the nation’s since at least 1976.
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