Should Alabama turn to ‘consumption’ tax?

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MONTGOMERY, Ala (WRBL)- One lawmaker wants to eliminate the state’s income and sales taxes and replace them with a tax based on consumption.

Representative Mike Holmes had this idea on the table for several years. Now, Holmes thinks it is the perfect time to re-structure Alabama’s tax system.

Under the “Alabama Economic Freedom Act,” state, county and municipal sales taxes would be a flat rate of 8.03%.

“We really need to do something because our income has shifted, if nothing changes we will be going backwards in revenue,” said Representative Mike Holmes of Wetumpka.

Chris Sanders with Alabama Arise –a group that advocates for low income families, is opposed to the bill.

Sanders believes if the bill is passed it could lead to massive education cuts because of lack of funding from taxes. If the bill is approved–it would have to be voted on by the people of Alabama.

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