Tax holiday good for shoppers

Published 10:49 pm Wednesday, August 5, 2009

By Staff
Marc Keahey
Guest column
Beginning at 12:01 a.m. Friday through midnight Sunday, Alabama families will enjoy the fourth annual state-tax-free holiday to help with the cost of back-to-school purchases. Items exempted from the state sales tax are school supplies, clothing, books and computers. And coming now, during the worse economic time since the Great Depression, this holiday will help a lot of people during this most difficult time. This also increases sales for our business owners, who need all the help they can get as well. I encourage you all to take advantage of this holiday next week.
Not only does this help Alabama families and businesses, but the sales tax holiday also helps the state of Alabama. According to the Alabama Department of Revenue, tax receipts for August have increased every year since we enacted the sales tax holiday. What? We cut taxes and get more tax revenue? It is simple, really: the sales tax holiday drives buyers to stores, who buy other things while shopping for back-to-school items 
This fact only proves one of my basic beliefs in running state government, that more money in the hands of our citizens, and not in the hands of state government, is what stimulates the economy.  The state sales tax holiday is the perfect example of that belief.
I think you could define me as a fiscal conservative. I have always supported low taxes, and the people of Alabama enjoy the lowest tax burden in the nation.  Last year I supported cutting the income tax by more than $50 million and the Alabama Legislature passed that bill into law. But I think there is still much more that we can do.
During the last two years I have supported eliminating the state sales tax on food.  Under this year’s proposal, 95 percent of all Alabamians would receive a tax cut.  Removing the state sales tax on groceries is an immediate tax cut that helps every family, every single one. By eliminating the sales tax, every family — every time they buy groceries — will receive an immediate tax cut.  Eliminating the sales tax on groceries is a tax cut delivered every day of every year, not a once-a-year tax reduction.
It is wrong to charge a tax on a basic necessity of life like bread and milk.  And that tax hits every family the same, regardless of income, meaning the sales tax on groceries disproportionately impacts the family budgets of middle class and working families of Alabama. 
Here is one important thing to know about the proposal to eliminate the state sales tax on food — this plan is a constitutional amendment. That means you will make the final decision whether to remove the state sales tax on groceries because all constitutional amendments must be approved by a vote of the people.
We have also enacted state savings “rainy day” funds, funds that hold tax money as a safety net for tough economic times.  We are seeing the wisdom of creating such funds as we tackle today’s rough economic conditions.  Yes, we have had to tighten our belts and make painful cuts during the last two years of state budgets.  But we have been able to protect the services for our children, seniors and schools because we saved money during good times to use in bad times.  I think this is one of the smartest things we have done as a state legislature, and I will always support these funds.
I also believe that we need to reduce the number of “no-bid” contracts used by state government.  I think state government should have to compare prices and shop around just like you do with your family’s money.  Over the last seven years, state government has spent billions — yes, billions — of dollars on no-bid contracts, averaging three no-bid contracts per day.  Common sense tells me that we can save the taxpayers of Alabama hundreds of millions of their dollars by reducing these contracts.  It is common — in the real world — for Alabamians to save 10 percent by just shopping around.  Why can’t state government?
I want you to know that every time I go to Montgomery to represent you, I go thinking about how to save state money, how to cut your taxes, and how to get the biggest bang for a state dollar when we do spend.
Marc Keahey represents Escambia County in the state Senate.

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