Two bills that are intended to decrease $82 million worth of income taxes are being moved to the Alabama House of Representatives. These income tax cuts 2023 were proposed because of a record budget surplus collected by the state.On April 5, the lawmakers in Alabama have advanced two bills that intend to use the state’s record budget surplus as Income Tax Cuts 2023. The two bills will reportedly provide $82 million worth of income tax cuts by modifying the highest and lowest tax brackets. An article in the AP News states that the bills have been approved by The House Ways and Means Education Committee and are now moving to the House of Representatives.
Two Bills Providing Income Tax Cuts 2023
According to an article on the Fox News, one of the bills that will provide Income Tax Cuts 2023 is intended to abolish the 2% tax that individuals currently pay on their taxable income. This means that the 2% tax that single taxpayers pay on the first $500 of their taxable income and the joint taxpayers pay on their first $1,000 will now be removed.
On the other hand, the second bill that will provide Income Tax Cuts 2023 will gradually decrease the 5% income tax rate of the state to 4.95% in 2027. The income tax rate is reportedly paid on the taxable income over $3,000 for single taxpayers and $6,000 for joint taxpayers.
With Alabama’s record budget surplus, the lawmakers are considering more Income Tax Cuts 2023. This includes abolishing the 4% sales tax on food because Alabama is one of the U.S. states that taxes its groceries. However, this plan is still being considered because removing the taxes on groceries may cost the education budget with over $600 million a year.