Alabama unlikely to abolish income tax

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MONTGOMERY, Alabama (WIAT) — As Mississippi plans to become Alabama’s third state neighbor with no income tax, Alabama lawmakers say that likely won’t happen here anytime soon.

“I would love to see it in my lifetime, that we wake up and do something smart like this,” said Rep. Mike Holmes, R-Wetumpka.

Holmes says that although the state has more revenue now than in the past, the legislature is sticking to the status quo.

“So much momentum to stay put. They, the bureaucracy, like the revenue stream where it’s at, it’s comfortable and safe,” Holmes said.

Holmes has previously supported bills replacing state income tax with a consumption tax. These proposals have not gained enough ground to be accepted.

“It’s fairer and I think it would actually be stimulating, having that extra tax revenue in the pockets of our citizens I think would stimulate the economy even more,” Holmes said.

But Sen. Andrew Jones, R-Center, said lawmakers were taking a cautious approach with tax cuts to stay financially stable over the long term.

“Obviously we want to give back to people, to give back to taxpayers, but we have to do it in a careful way to make sure we’re able to weather an uncertain economic future,” Jones said.

Jones says that while there hasn’t been discussion to remove state income tax, a bill currently in the legislature would reduce income tax for some Alabamians.

“It helps working-class people, low-income families and retirees. So the bill would essentially allow the first $6,000 of taxable income for these people to be tax-free,” Jones said.

So far, nine states have no income tax, including Tennessee and Florida.

Other tax relief bills are still on the table in the legislature, including one to reduce the food tax. State lawmakers will be back in session on Tuesday to consider that and more.

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