End the tax on food? Yay! By increasing another tax? Boo!

Let me fast forward for you:

Democrats: Let’s raise taxes elsewhere to replace the lost revenue from removing the tax on groceries.

Republicans: No.

Every year…

Bentley said Alabama is one of only four states that does not provide a break in its sales tax on food. He said the tax places a greater burden on low-income families.

The governor said a task force of experts on education, healthcare, taxation and revenue, and the economy will study best practices from comparable states and give him a recommendation this fall.

“I want to remove the state tax on food,” Bentley said. “Every family in Alabama should be able to find a good job and feed their families without being overly taxed.”

Rep. John Knight, D-Montgomery, who has repeatedly proposed bills to exempt food from the state sales tax, said he was pleased to hear Bentley bring up the issue.

“I know he talked about setting up some kind of committee,” Knight said. “But if he calls me I’ve got enough information on that and I will supply him all the information that’s needed.”

Alabama Arise State Coordinator Kimble Forrister issued a statement in support of Bentley’s call for an end to the sales tax on food.

Alabama Arise, which advocates for policies that would benefit low-income families, has called for that change for many years.

“Ending the state grocery tax would boost the economy and help millions of Alabama families make ends meet,” Forrister said. “We’re glad the governor recognized the need for Alabama to untax groceries, and we hope lawmakers will move quickly to end this regressive tax once and for all.”

Knight’s plan?

The planned substitute version of HB 1, sponsored by Rep. John Knight, would amend the Alabama Constitution to make two changes.

The bill would:

  •  Remove the state portion of the sales tax on groceries and over-the counter medicines. The overall sales tax on groceries and OTC medicines would be 4 percentage points lower than on other items. Local sales taxes still would apply, but the bill would bar localities from changing their taxes on groceries and OTC medicines alone. Any increase or decrease in the local sales tax would apply across the board, so the overall sales tax on those items would remain 4 percentage points lower than the sales tax on other items.
  •  Cap the state deduction for federal income taxes. Only two other states (Iowa and Louisiana) allow a full state deduction for federal income taxes. In 2011, more than half of the deduction’s total benefits will go to the top 3 percent of taxpayers, the state Revenue Department estimated last year. HB 1 would allow married couples with an annual income of $200,000 or less and singles with an annual income of $100,000 or less to keep their full deduction. The bill would eliminate the deduction for couples above $300,000 a year and singles above $150,000 a year. Taxpayers in between those amounts would retain a partial deduction

Been DOA for years, no reason to believe otherwise here.

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