Wall Street Journal rings Alabama for tax climate

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A study published by the Tax Foundation last month on the states‘ business tax climate shows “which states are serious about competing for labor and capital,” according to a recent editorial in the the wall street journal.

According to the Tax Foundation Tax climate for state enterprises in 2023 Index, Alabama has the worst tax climate for businesses in the southeastern United States. It is ranked 41st overall nationally for its business tax climate, falling two places since last year.

According to the editorial board of the Wall Street Journal, “none of the top four tax states levy personal income tax: Wyoming, South Dakota, Alaska and Florida.”

“Waiving an income tax is a hedge against the hike in tax rates that typically occurs,” wrote the editorial board of The Wall Street Journal. “Montana manages to agree on no sales tax. Wyoming and South Dakota have no corporate or personal income tax. North Carolina, in the 10th, levies a tax of 2 .5% on corporations, the lowest rate nationally, as noted in the report.”

According to the Tax Foundation, Alabama ranks in the top 20 in the nation when it comes to the competitiveness of its corporate, property, and unemployment insurance taxes compared to the rest of the country. However, its ranking of 30th overall in personal income tax burden and last in the nation in its sales tax burden weighs down other areas of the tax code.

According to Tax foundation in February. However, the four states with a higher average sales tax rate do not tax groceries at the full sales tax rate like Alabama.

“Too many bipartisan governors like to cut taxes only as temporary rebates or other benefits during election years, but the real economic benefits come from making a state more competitive in the long run,” the committee wrote. editor of the Wall Street Journal. “Americans and their money have never been more mobile, and Florida and other low-tax states will continue to reap the benefits of good policy.”

Most of the talk surrounding the upcoming 2023 legislative session in Alabama has focused on passing legislation creating a temporary income tax refund or pocket the large state surplus in a government savings account.

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