“We
must help our struggling families. This targeted tax relief
will do just that.”
- Governor Bob Riley
In 2006, Alabama took a first step in ending its unfair tax system passing the first
income tax cut in state history. Governor Riley’s proposed Middle Class Tax Cut
will further expand tax relief by phasing in tax breaks over 5 years to families
who make less than $100,000, providing significant tax relief to
90% of Alabama
families. This plan will stimulate economy, boost revenue and ensure that Alabama’s
progress continues.
Governor Riley’s Middle Class Tax Cut increases the filing threshold for families
of four from $12,500 to $15,500 over the next 5 years by:
- Gradually increasing the personal exemption for a married couple
from $3,000 to $4,000 ($1,500 to $2,000 for single taxpayers).
- Gradually raising the per-child dependent exemption to $2,000 for
all taxpayers who make less than $100,000.
- Gradually increasing the number of families who can claim a $7,500 standard deduction
(by increasing the income level at which the $7,500 deduction is phased down).
To prevent revenue loss in the case of an economic slowdown, the proposed legislation contains a revenue growth guarantee. Each year, the next phase in the tax cut will
occur only when 3 percent estimated growth in the ETF has been certified by the
Department of Finance.
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