Prof. Susan Pace Hamill said Alabama’s regressive tax structure helps explain why some of Alabama’s wealthier ZIP codes have lower rates of Alternative Minimum Tax filers and why Alabama has one of the lowest AMT filer rates in the country.
High-tax states with graduated income taxes, like New York, result in a larger federal tax deductions for higher-income earners, according to AL.com.
“The AMT kicks in when a wealthier person has a lot of certain deductions,” she said. “These folks pay a greater percentage of income in taxes.”
Hamill said a high earner in New York with the same income as a high earner in Alabama is more likely to be hit by the AMT.
“Regressivity is not just a poverty thing,” she said.
For more, read “Who Pays The Rich Man’s Tax In Alabama? Check Your County and ZIP Code.”