Overtime Tax Cut Axed in Montgomery?!

Hold on to your hats, ChumCity citizens! The Alabama Policy Institute (API) is throwing shade at our lawmakers in Montgomery for ditching the overtime pay tax cut in the upcoming 2025 session.

Grocery Tax Cut Instead?

Instead of extending the overtime break, the powers-that-be decided to slice the state's grocery tax share from 3% to 2%, starting September 1, 2025. API's not happy, arguing this move ignores the massive savings Alabamians enjoyed thanks to the overtime cut.

"Game-Changer" Lost?

API argues the overtime tax exemption was a "game-changer," boosting work volume and easing the labor shortage. They claim it saved taxpayers over $230 million in just nine months, with annual savings hitting over $300 million.

Money Matters and Education

Opponents worried about the revenue hit to the Education Trust Fund (ETF). But API counters that the shortfall wouldn't have been a deal-breaker. They point out that the $320 million in overtime tax cuts was just a tiny slice (3%) of the ETF's $10.65 billion revenue pie.

Following the Lead

API believes Alabama should be more like other Republican-led states when it comes to tax relief. They highlight how Mississippi and Georgia have used surplus revenue for significant income tax cuts, while Alabama has been slow to give taxpayers meaningful relief.