Patrick Cagle has been named the new president of the Alabama Coal Association, succeeding George Barber, who has elected to retire after seven years of service to the coal group which was first formed in 1972.
Cagle, who has worked with the association on legislative matters in the past, has more than 10 years of experience in navigating Alabama’s political landscape. As executive director of JobKeeper Alliance, a 501c(4) nonprofit whose mission is to protect and create quality jobs, he previously worked hand-in-hand with the coal industry to oppose onerous, job-killing regulations.
Cagle and his wife, Molly, have a 15-month-old son, Bankston. They are active members at Church of the Highlands. Cagle is an avid outdoorsman and a member of the Conservation Advisory Board, which assists the Alabama Department of Conservation and Natural Resources with the formation of hunting and fishing regulations.
Alabama AG: beware of tax scams
MONTGOMERY, Ala. — Alabama Attorney General Luther Strange (R) warned Alabamians to be on the lookout for income tax scams this season that could lead to identity theft. In a post on his official website, Strange noted what Alabamians should watch out for and offered tips to keep from falling prey to certain tax preparers with potentially deceptive offers.
“Between late January and early April, when almost all American households have to file an annual tax return, can be open season for unscrupulous tax preparers whose objective is to harm consumers’ bottom line, and identity thieves attempting to steal tax refunds,” Attorney General Luther Strange wrote in a press release.
To avoid catastrophe, the Attorney General’s Office recommends that Alabamians take the following steps:
- • Do it yourself: You can file your own tax return electronically or on paper. Filing online is free with the IRS.
• Take advantage of free preparation if you qualify. Lower-income consumers can use free tax preparation software found at www.irs.gov through Free File. If your income is $54,000 or less, you can get free tax preparation assistance at a Volunteer Income Tax Assistance (VITA) location near you.
• Pay your tax preparer before filing – many preparers charge higher fees when deducting the cost of preparation from your refund. Avoid paying extra for this supposed convenience.
• Avoid refund advances – no one can guarantee to obtain your refund from the IRS faster than you can. Tax refund advances are actually loans from your preparer, and like almost any loan, will cost you additional fees to receive.
• Consider direct deposit – if you file electronically and choose to have your refund directly deposited into your bank account, the IRS does not charge additional fees and is often able to provide your refund sooner.
If you think that theft may have already occurred, Strange offered a separate set of recommendations.
- • Contact the IRS immediately
• Place a fraud alert on your credit reports with: TransUnion, Experian, and Equifax
• Create an identity theft report at www.identitytheft.gov
• File a police report
Shelby introduces Flat Tax to abandon ‘complex, confusing, and inefficient’ tax code
WASHINGTON — U.S. Senator Richard Shelby (R-AL) introduced legislation Tuesday that would establish a flat federal tax on income for the first time since the implementation of the IRS.
The “Simplified, Manageable, and Responsible Tax (SMART) Act,” would tax income at 17 percent, with significant exemptions.
“On Tax Day, the American people are reminded that our nation’s tax code is unnecessarily complex, confusing, and inefficient,” said Sen. Shelby in a press release. “The SMART Act is a straightforward solution that would require taxpayers to only file a simple postcard size return, which would save Americans time and money. The SMART Act would also allow businesses to redirect resources away from tax compliance and instead focus on expanding their businesses and creating jobs.”
The SMART Act would include exemptions of:
• $14,480 for a single person;
• $18,490 for a head of household;
• $28,960 for a married couple filing jointly; and
• $6,240 for each dependent.
These exemptions would be indexed the consumer price index. According to Sen. Shelby, who has introduced similar legislation every Congress since being elected in 1986, the SMART Act would give American individuals and businesses a competitive edge, create and retain jobs in the United States, and curb offshoring.
As chairman of the Senate Banking committee, Sen. Shelby has the clout to guide the SMART Act to a vote.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
Heritage Economist: Bentley should abolish state income tax, not push tax hikes
(Video Above: Heritage Foundation Chief Economist Steve Moore discusses Gov. Bentley tax hike proposal)
BIRMINGHAM, Ala. — In video for the Alabama Policy Institute (API), Heritage Foundation Chief Economist Steve Moore says Governor Bentley’s proposed tax increases are the wrong way to increase revenue for the state, and in fact will only serve to drive businesses and workers—the real sources of growth—away from the state.
“When states raise their taxes, especially when they raise their tax rates, that it actually leads to jobs leaving the state, it leads to higher unemployment, it leads to income decline in the state,” Moore said. “The problem with the Alabama budget right now is that the state is not growing fast enough, not enough jobs are being created. If you raise taxes on the business creators and on the workers, and on the investors, you’re going to get less businesses and you’re going to get less workers, and less investors. Under that kind of circumstance, you’re actually going to have higher unemployment, so I don’t get the logic behind raising taxes to try to balance the budget.”
Instead Moore recommends a structurally lower tax system, including making Alabama the 10th state to abolish the state income tax.
“The goal of Alabama should be to be more like Texas, not to be more like New York, where taxes keep going up year after year, and jobs and businesses keep leaving,” Moore quipped.
API Vice President Katherine Robertson also expressed concerns on Tuesday that the Governor’s proposed tax increases are not “dead on arrival” in the legislature, as was previously hoped.
“As the Alabama Legislature considers various proposals for closing the budget gap in our state General Fund, API continues to push for reforms to the very programs that are causing repeated budget shortfalls as an alternative to raising taxes,” Robertson said.
API is publishing two new research papers in the coming weeks, focusing on cost-saving reforms the legislature can consider in place of the Governor’s tax increases.
“Advertising higher taxes as the only option for closing the budget gap without cutting government services presents a false choice,” said API’s press release accompanying the video. “Rather, the current budget crisis should serve as an impetus for substantive reforms that tackle the real drivers behind the shortfall and will provide the state financial stability for the long-term. Alabama’s lawmakers should continue on in this worthy pursuit and stay true to their campaign promises.”
Pieces of Governor Bentley’s proposed $541 million tax increase have Republican sponsors in the legislature, but none of the tax hikes have been brought before a committee to this point. The legislature is expected to begin working on the budget next week, when they return from Spring Break.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
Alabama Rep: Abolish state income tax, move to consumption tax — ‘It’s the only tax illegals pay’
ENTERPRISE, Ala. — Alabama State Rep. Barry Moore (R-Enterprise) on Sunday added his opinions to the growing debate over what the state should do to address the shortfall in its General Fund Budget, which Senate General Fund Budget Chairman Arthur Orr (R-Decatur) predicts could be in the neighborhood of $260 million.
But unlike Gov. Bentley, who has suggested revoking some of the tax deductions Alabamians currently enjoy in an effort to bring in more revenue, Moore said he’d prefer doing away with the state income tax all together and moving entirely to a consumption tax.
Many conservatives have long advocated for a consumption tax, even on the federal level. The Fair Tax is the most widely known proposal. It would “replace all federal income taxes, payroll taxes, gift taxes, and estate taxes with a single broad national consumption tax” on new goods and services.
A host of free market economists have predicted that moving to a consumption tax would significantly boost economic growth. But in a tweet on Sunday, Moore pointed out another benefit many conservatives see in the consumption tax as it relates to one of the hottest debates currently raging at the national level, illegal immigration.
we need to combine budgets in our state do away w state income and go to a state consumption tax it's the only tax illegals pay #alpolitics
— Barry Moore (@RepBarryMoore) December 14, 2014
“Instead of illegal immigrants just getting a free ride, we could at least collect from them when they buy goods and services,” Moore said. “Right now, they’re driving on roads and taking advantage of government services and Alabama taxpayers are the ones who have to foot the bill.”
But Moore also sees added benefits for Alabama families.
“Alabamians would get to bring home more of their paychecks, since the state would no longer be withholding income taxes,” he said. “That gives middle class families more control over their budget.”
He does acknowledge, however, that there would be some challenges to crafting a system that could work for Alabama.
“We would have to look at big ticket items and adjust accordingly to keep consumers from going across state lines to buy them,” he said by way of example. “I know it would take a great deal of work, but it would not penalize working families the way the tax system does now. And I think it could ultimately be part of a larger solution to our General Fund Budget problems, as well.”
In Moore’s tweet, he also became the second legislator in as many weeks to advocate for combining Alabama’s budgets.
RELATED: GOP lawmaker says if Bentley wants to be ‘courageous,’ he should lead massive budget reform
Alabama is one of only three states in the country that operates out of two separate budgets — the Education Trust Fund (ETF), which funds the state’s education system, and the General Fund (GF) that funds everything else. As a result of the control the Alabama Education Association (AEA) had over Alabama’s state government for decades, the vast majority of the growth taxes are funneled into the ETF, often leaving the GF incapable of meeting its obligations.
Since combining the budgets would amend the Alabama Constitution, it would require a vote of the people, in addition to a bill passed by the Legislature. It would be a politically difficult move that would likely require the full-throated support of Gov. Bentley to pull off.
“The Governor has always supported the idea of combining the state budgets,” said Jennifer Ardis, Bentley’s communications director. But the Administration has not yet gotten into the specifics of the governor’s highly anticipated budget proposal.
Yellowhammer spoke to House Educated Budget Chairman Bill Poole (R-Tuscaloosa) on Sunday about the possibility of combining the budgets. Poole said that it could potentially be helpful, but only in the context of a much larger overhaul of the state’s current budget structure.
“I would only support merging the budgets as part of a comprehensive structural budget reform,” Poole said. “Siphoning off education dollars in order to prop up prisons and Medicaid in a vacuum doesn’t address any of the problems, but rather perpetuates the problem.”
In order for a push to combine the budgets to garner widespread support among legislative leaders, it would probably have to piggy-back on other major reforms. Potential ideas could including further government cuts; readdressing tax credits that create marketplace advantages; getting a better handle on the growing costs of Medicaid and prisons; and — perhaps most notably — un-earmarking.
88 percent of Alabama’s tax revenue is earmarked. That’s by far the highest percentage of any state in the country, and it leaves very little flexibility for lawmakers to increase government efficiency or to move money around to patch holes.
There will be many different ideas floated by lawmakers over the next several months before the 2015 legislation sessions begins in March. The Governor is expected to be the first out of the gate with a concrete proposal. But judging by the recent comments from Republican legislators, they’re hoping Bentley produces something bold that addresses the structural issues with the state’s budgets without sacrificing conservative principles.
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— Cliff Sims (@Cliff_Sims) December 3, 2014
Alabama climbs list of most tax-friendly states in the U.S.
According to an analysis of state tax rules by Kiplinger, a Washington, D.C.-based business forecasting and personal finance publisher, Alabama is among the most tax-friendly states in the country.
“State taxes and the ways they are collected vary significantly across the country,” Kiplinger explained. “For example, some states with low income taxes impose above-average sales or property taxes — a big consideration if you intend to own your house. Most states allow cities and counties to add their own sales taxes, which can boost combined sales taxes in some cities to 10% or more.
“It’s also important to consider the potential trade-offs. Low tax revenues may give a state less money to spend on education, transportation, public safety and other quality-of-life services important to you and your family.”
Keeping all of that in mind, Alabama climbed one spot on Kiplinger’s 2014 list, up to number 5 overall.
State income tax: 2%-5%
State sales tax: 4%
Gas taxes and fees: $0.21 per gallon
The Yellowhammer State moves up from 6th to 5th on our annual rankings because its state and local property tax collections, per capita, have dropped to the lowest in the U.S., according to the Tax Foundation. Income tax rates top out at a maximum rate of 5% on taxable income of more than $3,000 for single filers and $6,000 for married couples. Alabama also allows residents to deduct all of their federal income tax from state taxable income.
While the state’s sales tax is 4%, additional levies from cities and counties boost the state average to 8.5%. And Alabama is one of a minority of states that doesn’t exempt food from sales taxes. Prescription drugs and insulin-related items are exempt, however.
The median property tax on the state’s median home value of $119,600 is a low $398, according to the Tax Foundation.
Alabama also has one of the lowest cigarette tax rates in the U.S., at just 43 cents per pack.
That last little nugget about cigarette taxes is particularly notable considering the disastrous state of Alabama’s General Fund Budget, which is likely to renew calls for sin tax hikes.
On another note, the low tax, low regulation economic climate the state has created undoubtedly played a role in it recently being named one of America’s top states for doing business.
Here’s Kiplinger’s full top 10 list of the most tax-friendly states in the U.S.:
8. New Mexico
9. South Carolina
10. West Virginia
For all the details, check out the full article on Kiplinger.com.
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