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Artur Davis Unveils Taxpayer Protection Plan to End “Business as Usual” in State Government
Reforms Demand Transparency and Accountability and Fight Government Waste
MONTGOMERY – Gubernatorial candidate Artur Davis unveiled a detailed Taxpayer Protection Plan at a press conference in Montgomery this morning. Davis’ reforms demand transparency and accountability and fight government waste. Based upon Alabama-specific figures and comparisons with others states, Davis’ reforms would produce approximately $664 million in annual savings for Alabama taxpayers.
“Right now, despite the sincere efforts of many committed public servants, Alabamians are often poorly served by ‘business as usual politics’ that is riddled with corruption, waste and a startling lack of accountability to the individual taxpayer,” said Davis. “Fixing this broken system will be one of my top priorities as governor.”
Artur Davis’ Taxpayer Protect Plan calls for a top-to-bottom performance review of state government to be completed by the end of his first fiscal year in office. Additionally, Davis identified specific initiatives to dramatically improve Medicaid fraud enforcement, eliminate no-bid contracts, impose accountability on “pass-through pork,” aggregate state prescription drug purchases and curb outsourcing to costly private vendors.
“Alabama’s next governor must possess the political courage to fight waste and put an end to ‘business as usual’ in Montgomery,” Davis continued. “The detailed plan that I have proposed represents the most aggressive government transparency and accountability initiative ever considered in Alabama. I believe that Alabama voters are ready for reform and ready for a Governor who will make these changes a reality.”
Click here to read Artur Davis Tax plan
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Alabama can do better by modernizing tax code.
By Randy Brinson
The South’s economy has changed considerably since the 1930s and 1940s. The days of travel on dusty, bad roads or by train are gone, only to be replaced by Interstate highways and airplanes. Gone are most afternoon newspapers, a lot of mill villages and corner stores. In their place are modern communications networks, factory farms and consumer superstores.
But as the economy has changed and millions of new residents have flocked South, many aspects of Southern tax systems have remained static. Income tax structures, for example, have changed little from the times when $12,000 was a good annual income. Likewise, the sales tax has continued to focus on goods purchased from local merchants, even as more and more Southern shoppers are buying services and shopping online.
In other words, today’s marketplace is fueled increasingly by services and knowledge rather than the goods-driven economy of the 20th century. Southern state governments, however, haven’t adapted. It’s time for state lawmakers to wake up and modernize tax structures for the new economy.
A new policy book by the Center for a Better South (www.bettersouth.org) highlights ways legislators across the South can start. The book, Doing Better: Progressive Tax Reform for the American South, urges lawmakers to revisit state tax codes in a holistic manner to bring tax systems into the 21st century. All components – the income tax, sales tax, property tax and others – should be thoroughly examined and modernized to ensure the fairness, adequacy and integrity of tax systems.
In the Center’s analysis, Alabama scored among the lowest states in the South for enacting progressive tax reforms. While the state has taken some modernization steps to improve tax thresholds and accountability, Alabama has a long way to go to create a truly progressive tax structure.
One new idea is a refundable earned income tax credit, which Alabama could implement to make its tax structure more progressive and help bring working families’ incomes above poverty. In 2003, some 473,872 Alabama taxpayers claimed a federal earned income tax credit worth $967 million. If the state enacted a similar tax credit set at 10 percent of the federal level, working Alabama taxpayers at the bottom would get an additional $96 million in credits - - enough money to help lift many out of poverty. Furthermore, state income tax credits could be used to further their education, similar to the prepaid college tuition program or used to purchase private insurance or health savings accounts. The idea would be to move low income workers into better jobs and ensuring better health for them and their families.
Another idea: Even though Alabama’s economy is shifting more toward services, its government only taxes 37 out of 168 services identified by the Federation of Tax Administrators. If it taxed more services, it would reduce hidden preferences given to services. An example: If a state taxes the purchase of a lawnmower (a good), but doesn’t tax landscaping services that cut people’s lawns, there’s an institutional preference for the service over the good. Taxing the service would make the sales tax fairer – and generate more revenue for the state to expand its sales tax base. With more money from taxed services, the state could lower its overall sales tax rate to decrease the overall tax burden.
Modernizing state tax codes can make them fairer and more representative of today’s complex and rapidly changing economy. Among the 11 ideas explored in the book:
Southern states lose billions of dollars every year through special tax breaks, exemptions and holidays;
Southern states like Alabama can improve public health by raising the cigarette tax to the national average;
Southern states can modernize how they tax incomes and increase fairness by using new tools;
Southern states can provide fairer relief to seniors; and
Southern states can take proactive efficiency actions to increase accountability and improve government performance.
If we want to maintain our republican system of democratic government, and if we want to ensure all Southerners can pursue the freedoms they’re guaranteed, we have to ensure government’s framework is strong enough to make those things happen.
Taking a long look at how we raise revenues and trying to make those ways fairer will make the South stronger. The time is now.
Randy Brinson, a Montgomery doctor, is founder and chairman of Redeem the Vote, a national non-profit based in Montgomery. To order the book or download chapters for free, go to: http://www.bettersouth.org/doingbetter
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Religion, ethics complicate tax debates
"Whom would Jesus tax?" became the shorthand phrase to describe an unsuccessful effort this past summer by Alabama Gov. Bob Riley to restructure his state's tax system. Faced with a $675 million shortfall and a desire to upgrade the state's education system, Riley declared that as a Christian it was only right to raise taxes for the wealthy so the less fortunate could receive better state services. The move was surprising because Riley is a conservative who fashions himself a Reagan Republican. But even more surprising, Riley invoked the name of Jesus to justify his plan. Besides the desire to increase services and bridge a budget gap, Riley said that after much soul searching he had come to the conclusion that a good Christian could not allow Alabama's tax system, which placed a heftier burden on the poor than on the rich, to continue. In one of the most heavily Christian states in the nation, the proposition was soundly defeated.
The debate split the state's religious community, with moderate and liberal religious leaders lauding the plan along with secular advocates of social justice. Christian conservatives, including the state chapter of the Alabama Christian Coalition, condemned the plan as reckless and as the result of poor fiscal stewardship, and joined forces with tax conservatives to defeat the measure. Curiously, the Christian Coalition of America came out in support of the initiative. The debate also brought about another interesting split: Church-state separationists were generally silent on the issue of a government official citing Jesus as a reason to change a public tax system. Christian conservatives labeled the silence as hypocrisy.
Still, the bigger issue remains the use of religion in a public financing discussion. Grover Norquist, president of Americans for Tax Reform, says that if such a strategy to raise taxes failed in Alabama, it would most likely not survive anywhere else. He speculates that if the measure had succeeded, it would have gained enough traction to jumpstart similar movements elsewhere. However, Christopher Mooney, director of Institute for Legislative Studies at the University of Illinois at Springfield, says that the Alabama initiative is only an extreme form of social justice movements that occasionally surface in America. Like Norquist, he says he doubts that religion will be used so overtly again in the future. Instead, he says that the underlying values of the movement - charity, compassion, equitability - will be used to push future efforts.
But if the latest incident is indicative of future efforts, Norquist and Mooney both may be wrong about whether religion again will be explicitly used in efforts to raise taxes. In Arkansas, conservative Republican governor and Southern Baptist preacher Mike Huckabee is working to raise taxes in order to bring parity to his state's education system, citing faith as his motivation.
Why it Matters
Helping the poor is a tenet of all major religions. As states cut social services and other programs to balance budgets, legislators are examining who is affected and what their options are for raising money.
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