Tax Reform

Taxes are a tool used to promote the common good. They provide the funding for education, child care, Medicaid, mental health care and other public infrastructure that improves everyone’s quality of life. But Alabama’s outdated tax structure fails to raise enough revenue to support these services, which holds our state back from realizing its full potential.

Alabama’s upside-down tax system also taxes many struggling families deeper into poverty. Low-income families pay twice the share of their income in state and local taxes on average that top earners do. Making that problem worse, Alabama is one of only three states with no tax break on groceries.

Arise has been a leading proponent of tax reform in Alabama for decades, and our analysis and advocacy were crucial in the enactment of a state income tax cut for families in poverty in 2006. Our research continues to show the range of benefits that Alabama would reap by untaxing groceries, ending large tax breaks for rich households and big corporations, and taking other steps to rebalance and modernize its tax system.

Personal Stories

‘Resilient communities begin with healthy people, period’

Warren Alan Tidwell has spent years doing work that depends on trust. He does the slow, often unseen work of bringing people together across differences after an emergency.

Issues
Budgets, Health, Tax Reform, Medicaid Expansion
Date
May 5, 2026
Author
Whit Sides
Fact Sheet

2026 Alabama election guide and candidate questions

2026 election questions Where do candidates stand? Meeting and talking with candidates as they campaign for your vote helps shape the conversation and let them know which issues are most important to their constituents. Below are some questions you can ask and info you can share when meeting candidates. Please let us know what you [...]
Issues
Health, Safety Net, Tax Reform, Voting Rights, Medicaid Expansion
Date
May 1, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook

We’re all in this together. All of us – people of every race, gender, age, income and background – benefit from a network of services from our local, state and national governments. From garbage collection to fire protection, from roads to schools, from public health to public safety, our tax dollars support the daily upkeep [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Introduction

The common good We’re all in this together. All of us – people of every race, gender, age, income and background – benefit from a network of services from our local, state and national governments. From garbage collection to fire protection, from roads to schools, from public health to public safety, our tax dollars support [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Budget Overview

How does state spending work? One state, two separate budgets Of the Legislature’s $39.1 billion in total appropriations for fiscal year (FY) 2022, about $20 billion came under the Education Trust Fund (ETF) Budget Act for education-related services. Another $19 billion came under the General Fund (GF) Budget Act for all other services. Lawmakers also [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Tax Overview

How do state taxes work? Most people would consider a tax system to be unfair if those who earned less paid a higher percentage of their income in taxes than those who earned more. But that’s exactly how regressive taxes work. As we’ve seen, Alabamians contribute to the funding of public services by paying taxes [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Income Tax

Feeling the pinch Alabama’s nearly flat income tax can’t offset our regressive sales taxes. As a result, the lowest-paid 20% of Alabama residents pay more than twice the share of their incomes in state and local taxes that the top 1% pay. It’s an upside-down tax system: It reduces the consumer spending that fuels economic [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Sales Taxes

Sales taxes: The key driver of Alabama’s upside-down tax system Should wealthy people pay at a lower tax rate than everyone else? Most Alabamians would answer with a resounding “no.” Yet that’s exactly the result that our state’s tax system produces. Families with low incomes in Alabama pay more than twice the share of income [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Property Taxes

How do Alabama’s property taxes work? The 1901 Alabama constitution established a property tax of 6.5 mills to help fund the state government. That was 30 years before our state had income or sales taxes. More than a century later, the state property tax rate has not changed. Property tax is applied to real estate, [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
Handbook

The Alabama Tax and Budget Handbook – Business Taxes

What taxes do businesses pay in Alabama? How does Alabama tax businesses? Business taxes provide the important “fourth leg of the stool” of our tax system. Alabama’s business taxes were restructured in 1999 after courts ruled the old system unconstitutional because it taxed out-of-state companies at a higher rate. Today’s structure relies on two taxes: [...]
Issues
Budgets, Tax Reform
Date
March 19, 2026
Author
Alabama Arise
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