Alabama

Major tax overhauls are on the agenda in a record number of states, and “Who Pays?” documents in state-by-state detail the precise distribution of state income taxes, sales and excise taxes and property taxes paid by each income group as of January 2013.  It is a critical baseline against which future proposals can be measured. […]

The gasoline tax is the single largest source of funding for transportation infrastructure in the United States, but the tax is on an unsustainable course. Sluggish gas tax revenue growth has put strain on transportation budgets at the federal and state levels, and has led to countless debates around the country about how best to pay for America's infrastructure.

In most states, the gasoline tax is set at a fixed number of cents per gallon of gas. South Carolina drivers, for example, have been paying 16 cents per gallon in state tax for more than a quarter century.1 But while this type of fixed-rate gas tax may appear to be flat over time, its lack of change in the face of inflation means that its "real" value, or purchasing power, is steadily declining. In ten states, this decline has brought the state's inflation-adjusted gas tax rate to its lowest level in the state's history.

State and local tax codes include a huge array of special tax breaks designed to accomplish almost every goal imaginable: from encouraging homeownership and scientific research, to building radioactive fallout shelters and caring for "exceptional" trees. Despite being embedded in the tax code, these programs are typically enacted with tax policy issues like fairness, efficiency, and sustainability only as secondary considerations. Accordingly, these programs have long been called "tax expenditures." They are essentially government spending programs that happen to be housed in the tax code for ease of administration, political expedience, or both.