Governor candidates answer Arise questions on taxes, budgets

Arise reached out to 2018 Democratic and Republican gubernatorial candidates to seek their thoughts on policies that affect low-income people in Alabama. (We contacted candidates via email or other electronic means available on their websites. Those resources were not available for all candidates.) Arise does not support or oppose any candidates for elected office. This questionnaire is offered for informational purposes only.

We received replies from three candidates: Sue Bell Cobb, James Fields and Walt Maddox. We will share their responses in two parts. Responses are listed in alphabetical order by last name.

Part 1, which is below, features the candidates’ responses to questions about taxes and budgets in Alabama. Part 2, which we will share June 2, will feature their responses to questions about housing, payday lending and transportation.

Question 1: Alabama is one of three states that give no state tax break on groceries, and we have the highest income tax in the nation for a family of four at the poverty line. In most states, this family would not pay income tax at all. How would you change Alabama’s upside-down tax system?

Sue Bell Cobb: “The first step to making Alabama’s tax system fairer is to remove the tax on groceries because Alabamians should not pay tax on something as essential as food. To accomplish this, we must replace that lost revenue. A politically feasible solution would be to work for passage of a flat state income tax, eliminate deductions for the wealthy, and add an exemption for anyone at or below the federal poverty line. I also believe that Alabama’s income tax should be calculated based on federal taxable income instead of adjusted gross income.”

James Fields: “Clearly, the legislature, a majority of whom answer only those who fund their campaigns, cannot accomplish tax reform. I would establish a non-partisan Fair Tax Commission, tasked with righting the current upside-down system, including but not limited to addressing equitable taxes on real property, repeal of the ‘current use’ law, raising the threshold of taxable income, eliminating the tax on food, and revising deductions which favor those most able to pay, including corporations. Its work and any enabling legislation must be clearly and transparently presented and explained to the people to counter the certain opposition.”

Walt Maddox: “I support eliminating the state sales tax on groceries. But to do so we must offset the lost revenues with another source. One idea is to eliminate the state deduction for federal income taxes, which would require a constitutional amendment to be voted on by the people. We also must find a way to amend the tax structure so that people living below the poverty line do not pay income taxes.”

Question 2: Alabama’s General Fund budget has a chronic structural deficit, with stagnant funding sources that cannot keep up with ordinary cost growth in Medicaid, mental health care and corrections. How would you ensure adequate, stable revenue for the General Fund?

Sue Bell Cobb: “The Lifelong Learner Lottery will finally provide adequate funding for education which will be derived not only from the $300 million generated annually by the lottery, but the additional income and sales tax resulting from the thousands of jobs created in every community by my plan. This additional revenue into the Education Trust Fund will allow us to move the remainder of the state’s share of revenue created by the internet sales tax into the general fund. Online retail is only going to increase with time, so it is critical that we have the full potential for revenue growth in the general fund. As costs rise for Medicaid, public health, DHR, prisons, and so many other essential state functions, we must address the stagnant revenue streams dedicated to the general fund. Additionally, a compact with the Poarch Band of Creek Indians could help provided desperately needed revenue to state coffers.”

James Fields: “We must have tax reform. It is the moral thing to do. I would establish a non-partisan Fair Tax Commission, tasked with righting the current upside-down system. Its work must address taxes on on-line purchases, equitable taxes on real property, repeal of the ‘current use’ law, raising the threshold of taxable income, as well as deductions which favor those most able to pay, including corporations. We must stop incarcerating non-violent offenders. Their work and enabling legislation must be clearly and transparently presented and explained to the people. Full legalization and taxation of marijuana could be an additional source of revenue.”

Walt Maddox: “The best way to secure funding is to grow the tax base by creating new and better jobs. Workforce training and affordable college is part of my Alabama Education Lottery. That, plus infrastructure improvements will attract new employers. Expanding Medicaid will infuse our economy over the first six years with $28 billion in increased business activity, $17 billion added to the state’s gross domestic product, and $10 billion added to the wages of Alabama workers; and create 30,000 new high-paying jobs. The solutions are there, they just need to be implemented.”

Posted June 1, 2018.

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