Relating to individual income taxes; to amend Section 40-18-5, Code of Alabama 1975, to eliminate the two percent tax rate on the first five hundred dollars ($500) of taxable income for single persons, heads of families, and married persons filing separate returns and would also eliminate the two percent tax rate on the first one thousand dollars ($1,000) of taxable income for married persons filing a joint return.
Impact
The elimination of the two percent tax rate on the specified income brackets is expected to provide considerable tax relief to low-income earners in Alabama. By exempting the initial taxable income for these groups, the bill aims to create a more equitable tax framework that lessens the burden on the most financially vulnerable populations. This initiative reflects a broader movement to adjust tax policies to alleviate financial pressure and enhance economic wellbeing among Alabama residents.
Summary
SB47 is a proposed piece of legislation in Alabama aimed at modifying the existing individual income tax structure. The bill specifically seeks to eliminate the two percent tax rate on the first five hundred dollars of taxable income for single persons, heads of families, and married persons filing separate returns. For married couples filing jointly, the bill proposes to eliminate the same two percent tax rate on the first one thousand dollars of taxable income. This bill, if passed, would amend Section 40-18-5 of the Code of Alabama 1975.
Contention
The proposed changes in SB47 may generate discussion among legislators regarding the potential impacts on state revenue. Proponents of the bill argue that it is a necessary step in providing tax relief amidst rising costs of living, while critics may express concerns about the long-term financial implications of reducing income tax rates for the state. Lawmakers will likely debate the balance between providing immediate financial benefits to individuals and the need to maintain a sustainable revenue stream for state programs and services.
Income Taxes; to make technical changes to the funding provisions of the CHOOSE Act credits and increase funding, and to extend the sunset date for deductions for ABLE contributions.