Home | Basic Principle | About Us | Receive Updates | Contact









Republican Governor's Attempt For Fairness Fails

page 1 of 3

Back when people were still thinking about basic checks and balances of power and influence in forming this country, they noted that corporations were chartered with special advantages over other forms of business. Along with these privileges, however, came a proviso in some jurisdictions, that corporate gains from financial and legal advantages were not to be used for the purpose of influencing public decisions. How far is the pendulum swinging? - D. Glicken

Tax Justice
Reported on the Bill Moyers' TV News Show “NOW” 11/21/03


Governor Riley

MOYERS: In the Montgomery state capitol this past September, some Alabama mayors and local politicians — most of them Democrats — threw their support behind a radical tax plan, one that would reverse 100 years of inequality in Alabama. What was surprising was the architect of the plan: a conservative, self-styled Reagan Republican, Alabama's governor, Bob Riley.

The recently elected governor wanted to reform the most unfair tax system in the nation with the biggest tax hike in Alabama's history. He would do it by raising taxes on the wealthy and cutting taxes for the poor. Inequality takes on special meaning in Alabama, where over forty percent of families earn less than $35,000 a year, and one fifth of the children live in poverty: here, the state tax system itself is weighted against the poor.

RICHARD BAILEY: (an author and historian being interviewed on the show): We’ve had extremely low property taxes in the state of Alabama on one hand. And secondly, we've had a regressive tax structure on the other hand. And that regressive tax structure has really penalized the poor.

MOYERS: The tax structure is regressive because the people with less money pay three times as much of their income in taxes as do those with the highest income.

ROBERT POLLIN: (an economist being interviewed on the show): Most of the tax burden is a sales tax, and in Alabama, even food is taxed. Poor people spend 25 percent of their income on food.

MOYERS: When it comes to state income tax, the lowest-earners — two-thirds of Alabama's population — pay 11 percent of their income in taxes. In contrast, the wealthiest 1 percent pays less than 4 percent.

Alabama's been called an economic plantation: for example, trees cover more than 70 percent of the state, and forestry is Alabama's leading industry. Yet timber and paper companies contribute less than 2 percent of all property tax revenues.

Meanwhile, Alabama's families are taxed on earnings as low as $4,600 a year. Even by the standards of the poor Southern states, this is extreme. In Mississippi next door, you pay no income taxes until you earn $19,000.

RICHARD BAILEY: We have not changed that tax structure since 1933. Why would anyone in 2003 want to hold on to a Depression era tax structure?

MOYERS: Last May, after just five months in office, Governor Riley decided drastic changes were needed. He unveiled a tax reform plan that would ask the well to do to shoulder more of the state's tax burden. Riley decided against cutting vital services to fill the hole in the budget. Instead, he proposed raising Alabama's taxes to a record $1.2 billion a year, an amount he said would make up the shortfall as well as reform a state government infamous for pork barrel spending and inefficiency.
I don't think
this is a liberal or conservative policy.

I think it's just a matter of basic fairness.

- Bob Riley
Alabama Governor (R)

MOYERS: For Riley, improving education was key. $300 million would be used to revitalize schools in a state where funding for education ranks near the bottom of the 50 states. The state's illiteracy rate is as high as 25 percent.

GOVERNOR RILEY: (being quoted on the show via edited news clips): I don't think this is a liberal or conservative policy. I think it's just a matter of basic fairness… To charge someone an income tax that's making less than $5000 a year I just think is disproportionate.

MOYERS: In a state where the Ten Commandments have been dragged into the Supreme Court, there were moderate Christians who agreed with Riley, saying the inequality of the state's existing tax system was downright "un-Christian."

Susan Pace Hamill, a law professor and Methodist, argued in a widely quoted essay that a system that, quote: "economically oppresses low-income Alabamians" while benefiting the wealthy was "immoral." Governor Riley, a Southern Baptist, picked up on it and quoted her, “Those of us blessed with more need to contribute a little more and need to be compassionate about it.”

page 1 | 2 | 3



Stories | Making Sense | Taking Action | Passing It On