Study on Alabama’s tax system: The less you make, the bigger share you pay

Low- and middle-income Alabamians pay more than twice as much in taxes as a share of their income compared to the state's wealthiest residents, according to a study released Wednesday by the Institute on Taxation and Economic Policy (ITEP), a nonprofit research organization based in Washington, D.C. The study, Who Pays?, analyzes tax systems in all 50 states.

Every state's tax system is regressive, meaning the lower one's income, the higher one's tax rate. Alabama's tax system is the nation's 12th most regressive, ITEP finds. The Alabamians who earn the least – less than $17,000 a year – pay 10 percent of their income in state and local taxes. By contrast, the top 1 percent of Alabama earners – those who make $392,000 or more – pay an average of just 3.8 percent of their income in state and local taxes.

"Alabama's upside-down taxes hold our state back and drive low-income families deeper into poverty," ACPP policy director Jim Carnes said. "Our leaders could help right the ship by repealing the state grocery tax and ending tax breaks that favor wealthy people who could easily afford to pay more. It would help modernize our state's tax system, and it would help Alabama raise enough money for crucial services like education and health care."

Read ACPP's news release here.

Read ITEP's full Who Pays? report here.

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