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Tax on gasoline in Alabama

On March 12th, 2019, Governor Kay Ivey signed Alabama gas tax hike into law. The law increases by ten cents per gallon the tax on fuel. As of today, the tax is 18 cents per gallon of gasoline and 19 cents per gallon of diesel. Therefore, this new tax increases by more than 50% the present day tax on fuel. The money raised will – in theory – be used to improve Alabama’s infrastructure and the shipping channels in the port of Mobile. That level of detail wasn’t included in the bill.

In modern democracies taxes are not levied to satisfy the whim of a monarch, they are levied to provide services useful for everybody, and in this sense, we all agree that Alabama’s infrastructure needs to be modernized and properly maintained, and so do the State’s organization for health care and schools (two other major needs that are not met in Alabama). Nonetheless, irrespective of the common need to be satisfied, when a new tax is imposed, the question to ask is whether the taxation is equitable.

A tax on fuel will be paid mainly by those who use fuel for work, transportation, agriculture, landscaping, that is, disproportionately small businesses and private citizens. The improvements of infrastructure and of the shipping channels in the port of Mobile are of common interest. They will also benefit large corporations in a measure disproportionate to their contribution to the amount that the new tax will raise. In this sense we can consider that this new tax on gasoline is not equitable.  It’s regressive:  a tax that is least affordable to those who already can least afford it.

Let’s remove the tax on groceries to help make up for it, shall we?

Paolo Giacomoni, Madison County Democrats


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