Staff Reporter of THE WALL STREET JOURNAL
TUSCALOOSA, Ala. -- For nearly a century, reformers have tried in vain to change this state's antiquated tax structure. The Alabama code requires families of four earning as little as $4,600 to pay income tax, the nation's lowest threshold. It charges a higher sales tax on baby formula than on cattle feed and permits timber interests to pay relatively meager property taxes compared with homeowners.
Now an unlikely force is setting off a tax revolt in Alabama: religious fervor. The catalyst is Susan Pace Hamill, a tax-law professor who used a sabbatical at a divinity school to write "An Argument for Tax Reform Based on Judeo-Christian Ethics."
"How could we, in a free society of a bunch of Christians, have the worst, most unjust tax structure that you could ever have dreamed up?" asks Ms. Hamill.
Her paper, published last month in the Alabama Law Review, has been cited by influential Alabamans in business and the state house, including the recently elected Republican governor, Bob Riley. It has also brought some of the most powerful of Alabama's 8,000 churches into the fray, with pastors culling from the article to preach about the Christian duty to demand a tax code that falls more evenly on rich and poor. Recently, the paper has been condensed into a brochure titled, "The Least of These," a reference to Jesus' teaching about helping the disadvantaged, and 10,000 copies are now being distributed to churches statewide by Samford University, where Ms. Hamill attended divinity school.
Alabama churches may be powerful enough to succeed where past tax-code reformers have failed. One longtime obstacle: powerful agricultural and timber interests who have fought to protect rules that keep their taxes very low.
Moreover, most of the tax code is enshrined in Alabama's complicated 100-year-old constitution, making changes more difficult than in other states. To increase property taxes, individual counties have to get permission from voters, and in most cases the Alabama legislature.
Even then, the state constitution imposes absolute dollar limits on property taxes for individual landowners. Counties can raise the sales tax, a portion of which goes to the state, without permission. Those rates have crept as high as 11%, and make up more than half the state's revenue. Because poor and working-class people spend nearly everything they earn, sales taxes take a bigger bite of their income. In Alabama, that translates into an especially heavy burden on African-Americans, who account for about a quarter of the state's population but half of its poor.
Mr. Riley credits Ms. Hamill with bringing the churches into the tax debate. "The churches have never been there" for reform until now, he says. Still, they've flexed their muscle at other times. In 1999, churches rallied their congregations against a state lottery sought by then-Democratic Don Siegelman, and are credited with its defeat.
Three days after Mr. Riley took office Jan. 20, he created a commission to recommend constitutional changes that would clear the way for "comprehensive tax reform," a spokesman says. The United Methodist Church, the Presbyterian Church (USA), the Alabama Southern Baptist Convention, the Episcopal Church, as well as local Roman Catholic and Jewish officials, have all recently endorsed tax-code changes.
The growing religious movement for tax reform dovetails with other forces pushing for change. In November, after Mr. Riley's election, state business leaders formed a lobbying coalition to create a new tax structure that would support schools and other government services, even if companies have to pay more. The coalition fears Alabama's budget crisis is taking such a toll on education and other priorities that it would scare away potential investors.
Even with business and Church support, Mr. Riley faces big challenges in enacting reform. First, he has to push constitutional reform through a reluctant legislature, where powerful farming and timber interests remain well represented. Some conservative Christian groups also oppose reform. Alfa, the Alabama Farmers Federation, which also represents timber growers, has circulated a position paper arguing against any changes to the tax code. Mike Kilgore, executive director of Alfa, says that property tax valuations and collections have grown "at astounding rates" in recent years, and argues that the state needs to spend its money more wisely.
In her stump speech, which she gives at least twice a week, Ms. Hamill reminds congregations and civic groups that both the Old and New Testaments condemn economic oppression of the poor. Her paper cites Micah 2:1: "Woe to those who plan iniquity, to those who plot evil in their beds!" Ms. Hamill points to other Old Testament references that say the poor deserve a "minimum opportunity" to succeed. Alabama's underfunded schools fail that test, she says.
Ms. Hamill, 42, attends Trinity United Methodist Church in Tuscaloosa, and has traveled to numerous churches around the state to speak, often bringing her husband and two kids along so they can attend Sunday services together. After graduating from Emory University and Tulane Law School, the Florida native did a stint at the Sullivan & Cromwell law firm in New York and worked as a lawyer at the Internal Revenue Service headquarters in Washington. Eight years ago, she moved to Tuscaloosa to teach at the University of Alabama Law School.
As a traditional Methodist, Ms. Hamill at first felt like an outsider among Alabama's large evangelical Christian population. She decided to immerse herself in the study of evangelical Christianity during a sabbatical at Samford University's Beeson Divinity School in Birmingham. While there, she read a local newspaper explaining how Alabama taxes families of four with very low incomes. "I assumed the $4,600 figure was a misprint," she told a recent Kiwanis Club breakfast meeting in Tuscaloosa.
Her thesis, published in draft form in August, swiftly took hold. Mimeographed copies were passed around law firms, government offices and think tanks. Mr. Riley, locked in a tight gubernatorial election campaign against the incumbent Mr. Siegelman, endorsed Ms. Hamill's paper during a television appearance in October 2002 and since being elected has become a more vocal supporter of tax reform. (Mr. Siegelman had made tax reform a big part of his campaign.)
History of Conflict
Alabama's tax code is an artifact of the state's history of racial conflict. Before the Civil War, the state derived most of its revenue from a slave tax. After slavery disappeared, the state raised property taxes to make up for the lost income. That caused a backlash from whites, who owned the vast majority of land.
A state constitution adopted in 1875 capped property taxes. A 1901 version made the burden even lighter. The goal of industry bosses and land barons who wrote the latter document was "to establish white supremacy in this state," constitutional-convention president John Knox said at the time.
That Jim Crow-era effort sharply restricts Alabama's tax base today. Forests stretch across 71% of the state, but timber land is taxed at a preferential agricultural rate that averages 95 cents per acre. Georgia timber owners, by comparison, pay an average of $4 to $6 per acre, according to some studies, and big owners pay more per acre. Six of Ms. Hamill's law students spent several months calculating how much the timber industry contributes to the total property-tax pie: less than 2%.
Alabama's $4,600 income-tax threshold for families of four is the lowest among the 42 states that levy income taxes, according to several studies. In neighboring Mississippi, the first $19,600 of household income is exempt. In California, the exemption is $38,800. Mr. Riley calls the situation "immoral."
Academics, public-policy experts and state newspapers have railed against the peculiarities of Alabama's tax code for decades. "Big Jim" Folsom, a 6-foot-8 populist Democrat, called for reform after winning the governorship in 1946. But Mr. Folsom's efforts died in the Alabama Legislature, which has remained the graveyard of reform ever since.
Last year, Alabama House Speaker Seth Hammett couldn't even persuade colleagues to vote on a resolution calling for voters to decide whether to go forward with the constitutional reform that's necessary to change the tax system. Some conservative Christian groups, including the Christian Coalition of Alabama, cheered the Legislature's inaction on grounds it could lead to higher taxes and legalized gambling. Some reform opponents object on religious grounds to giving the state broader taxing authority.
Ms. Hamill believes she's been called by God to this battle. She has little first-hand knowledge of those she seeks to help. For instance, she hasn't visited many of the poverty-stricken parts of the state that she has studied and written about. "Until recently, most of my field trips out of the ivory tower were speaking engagements to the business and tax crowd," says Ms. Hamill.
She was a guest one recent Sunday at Vestavia Hills Baptist Church in Birmingham. Leading an adult Sunday school class, Ms. Hamill described Alabama as "the modern version of ancient Israel. The land's being gobbled up. There's no minimum opportunity. And we're staying afloat on the backs of the poor." Vestavia's upper-middle-class congregation was so riveted by Ms. Hamill's presentation that she was invited back for another session.
Other groups are more stubborn. One area of resistance: the state's Black Belt, a cluster of former cotton-growing counties mostly in the state's western midsection, nicknamed for its dark soil. Though it is rich in timber, the region has a paltry tax base and some of Alabama's least-equipped schools. If any region could benefit from tax reform, it's the Black Belt. Yet in the antebellum town of Marion, Zion United Methodist Church Pastor Fairest Cureton predicts many of his black parishioners will resist.
He says he will preach in favor of reform. But he says poor people tend to like the sales tax, because they pay it in small increments. And so they may reject change as an effort to make them pay more.
Across town, Rev. Michael Perry of Siloam Baptist Church, whose members include the county's wealthiest landowners and are primarily white, won't raise the subject. "As a whole, the tax system is terribly out of skew," Rev. Perry says. "But my parishioners would not entirely agree."
In Tuscaloosa, Ms. Hamill was addressing a Sunday school class last fall at the blueblood First Presbyterian Church when teacher Bob Montgomery, a pharmaceutical salesman, argued that it's not the state's job to help the oppressed. That's up to churches and charities, he explained. "My tithe goes to the poor," he told Ms. Hamill.
Later that morning, during the regular church service, Mr. Montgomery heard Pastor Charles Durham deliver an impassioned call for tax reform based on Ms. Hamill's article. "It took a law professor to open my eyes," Rev. Durham proclaimed, pointing to her in the pew. A few weeks later, Ms. Hamill ran into Mr. Montgomery at the grocery store.
"What can I do to help?" he asked her. "Write an op-ed," Ms. Hamill replied. Mr. Montgomery's account of his conversion, headlined "What Would Jesus Do About Alabama's Tax System?" was published in late January in several Alabama newspapers.
Write to Shailagh Murray at
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