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Bill to remove state sales tax from food fails
Published Wednesday, March 25, 2009
MONTGOMERY — An effort to remove the state's 4-cent sales tax from groceries failed Tuesday in the Alabama House.
A vote to bring the proposed constitutional amendment up for debate failed. The House voted 56-42 for the bill, but that was short of the 59 votes needed to bring it up for debate in the 104-member House.
The sponsor, Rep. John Knight, D-Montgomery, promised to continue to push for passage of the amendment, which if it passed the Legislature would have to be approved in a statewide vote.
The vote in the House fell along party lines, with Democrats supporting it and Republicans opposing it. Democratic Rep. Richard Laird of Roanoke voted against the bill and was the only House member to cross party lines.
The bill would replace the lost income by removing the current deduction for federal income taxes paid from higher-income taxpayers. Republicans opposed that part of the bill, saying it would amount to a tax increase for some taxpayers.
Knight urged passage of the measure, saying it was not morally right to tax necessities of life such as food.
"This is giving the people a chance to vote on taking the sales tax off groceries. I trust the people of this state to do what's right," said Knight, chairman of the House General Fund budget committee.
Alabama and Mississippi are the only states that levy the full state sales tax on groceries. The other states either have no tax, a reduced tax, or a tax credit for low-income residents.
Alabama currently levies a 4 percent state tax on groceries, which produces about $400 million annually. Cities and counties also have taxes that would not be removed by the proposed amendment.
House Minority Leader Rep. Mike Hubbard, R-Auburn, said Republicans want to remove the sales tax on food, but don't want to do it by raising taxes for one segment of the population. He called Knight's bill "a shell game."
Hubbard said the measure would hurt many small business owners who pay the income taxes for their businesses.
"Now is not the time to raise taxes on any segment of the work force," Hubbard said.
The bill was opposed by some business groups, some of whom had lobbyists at the Statehouse Tuesday urging lawmakers to vote "no."
House Majority Leader Rep. Ken Guin, D-Carbon Hill, urged House members to put aside differences and remove the tax from food.
"Look into your hearts and consider the least of these," Guin said.
Rep. Paul DeMarco, R-Homewood, said he plans to introduce a bill that he hopes might serve as a compromise.
It is based on a plan used in Idaho where food is taxed, but some taxpayers, based on income, are offered a tax credit for groceries purchased.
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Comments
Posted by njones (anonymous) on March 25, 2009 at 12:54 p.m. (Suggest removal)
It must have been a sad day when groceries were taxed in the first place.
Posted by getbizi (anonymous) on March 25, 2009 at 2:54 p.m. (Suggest removal)
American_Nim......no state income tax, no tax on groceries, and your tag renewel is much cheaper in Fla. . No surprise so many retirees are there.
Posted by dixiedreaming (anonymous) on March 25, 2009 at 4:23 p.m. (Suggest removal)
I am glad they voted it down. No tax on groceries would be nice, but not if I lose my only REAL tax deduction on my state tax returns. The bill that didn't make up for the loss from the sales taxes, backed by Republicans, failed before it even got started. All the democrats in the state legislature want to do is raise more taxes on the working class. Frankly, I'm tired of spreading the wealth to the point that I can barely afford to feed my family. I work hard for a living.
Posted by AZSneed (anonymous) on March 25, 2009 at 4:25 p.m. (Suggest removal)
What is good for us,never gets passed. If it was a 4% increase, it would have passed.
Posted by kittycreek (anonymous) on March 25, 2009 at 4:53 p.m. (Suggest removal)
I figured the price of groceries would just get bumped up 4% so Wally World woud get richer and us working folks would pay more state tax- meanwhile nobody would benefit.
Posted by November162000 (anonymous) on March 25, 2009 at 6:43 p.m. (Suggest removal)
This is one of the few smart things I have seen the state legislature do in a long time. If they had passed this thing, they would have passed the lost tax income on to the ones that are having to pay for everything else, those of us who ACTUALLY pay Federal and State income taxes and property taxes. Of course, we aren't the voting base of the democrats that sponsered this stupid idea in the first place. Sooner or later this idea of taking from those that have and giving it to those that don't because they haven't worked and earned it has got to stop. Thankfully, at least in this case, it has this time. The only FAIR tax is a sales tax. That is a fact that cannot be escaped, inspite of the populist bilge that is spewed these days.
Posted by travlr423 (anonymous) on March 25, 2009 at 7:10 p.m. (Suggest removal)
well I'm glad it didn't pass, if i cant pay the tax then maybe i need to produce my own food. that is the single largest tax that the Hispanics cannot avoid. and is the single largest portion of the income they earn that we are getting back the rest is going right on to Mexico. and one thing they love to do is eat and drink alcohol.
Posted by kwsrgraves (anonymous) on March 25, 2009 at 8:40 p.m. (Suggest removal)
I hate the fact that we have the tax to begin with. However, the alternative was not a good choice. When you tell people we have a grocery tax in Alabama they laugh at you. When you tell them how low the property tax is, they are shocked. And I must say the cost of living is higher in Alabama than Las Vegas. But, I pay rent here and a mortgage at home in Bama. As for the grocery tax, I have compared certain items I buy weekly here versus the same items KW buys in Clanton. They are identical. Club Soda is 64¢ per bottle. Prilosec is identicle. Ham, bread, eggs, and milk are the same. Therefore I see no difference with a grocery tax. And those paying with wic or foodstamps or whatever the term is for freebie, don't have the grocery tax applied. Of course they never see it. I first thought removing this tax was ok. But I now believe those renting and not paying property tax SHOULD share this tax burden. Albeit small as it is.
Posted by November162000 (anonymous) on March 25, 2009 at 9:44 p.m. (Suggest removal)
As I said, sales tax is the only fair tax. Whether it is applied to groceries or underwear makes no difference.
Posted by carol (anonymous) on March 26, 2009 at 4:28 a.m. (Suggest removal)
November162000, You would think your statement was correct on first thought, but I beg to differ...............some people (gross as it is) don't wear underwear, so taxes on food would be the only fair tax...............I think everybody does eat :)
Posted by November162000 (anonymous) on March 26, 2009 at 6:02 a.m. (Suggest removal)
carol: I stand corrected! I don't know how I could have overlooked that scenario. :-)
Posted by nonexpert (anonymous) on March 26, 2009 at 4:11 p.m. (Suggest removal)
getbizi, it is much more expensive to live in Florida. No grocery tax or income tax-true . But OH, the property tax and "fees". We moved to Alabama from Central Florida a couple of years ago to keep from going under and it was a great decision. We were paying $4800 a year just for our home taxes and insurance. Since we moved we are told by friends and family that both have nearly doubled, if you can get homeowners insurance.
Posted by getbizi (anonymous) on March 26, 2009 at 7:46 p.m. (Suggest removal)
Nonexpert, if you were living in Central Fla. then you had to "pay to play". From Central Fla. and southward it so much more commercialized and expensive to live.
Posted by Rickey (anonymous) on July 15, 2009 at 2:02 a.m. (Suggest removal)
Perhaps kittycreek is on to something here. If they did away with the food tax, then they'd just jack-up the price of groceries. So we'd be right back where we started from. It's food for thought (no pun intended).
Posted by RktScience (anonymous) on September 3, 2009 at 10:18 p.m. (Suggest removal)
Rickey, you and kittycreek share a very common misunderstanding of basic economics. Wal-mart couldn't arbitrarily jack up the price of its groceries by 4 % without losing tons of money to Winn Dixie, Publix, etc. The only way the stores could increase prices across the board in this manner is if they all agreed to do so, and that would be collusion and that is quite illegal.
That being said, removing this tax and shifting the burden to high-earners is not too bright. We have enough zero-liability voters as it is.
Posted by Rickey (anonymous) on September 18, 2009 at 12:40 p.m. (Suggest removal)
RktScience -
Perhaps you're right. Admitedly, I am no economist; I can't speak for kittycreek herself. What you're saying makes sense, so thanks for the lesson in Economics 101 :) I am always open-minded and willing to learn.
Let me run this one by you for comment: Here in my adopted state, food is a necessity - not a luxury - and therefore, cannot be taxed. Likewise, heat is a necessity and landlords must provide tennants with heat, whereas air conditioning is a luxury and is not required. I don't want to get off track with the landlord-tennant-heat thing, but isn't it interesting that the "powers that be" would tax something that is a necessity and something that every living human being must partake of? I welcome your view and thank you in advance.
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