A taxing question

THE ISSUE

Alabama legislators and Gov. Bob Riley are in a contest to see who will pass legislation to exempt the federal tax rebate from state income taxes first.

Oh, the irony.

Congress has passed an economic stimulation package that will give citizens anywhere from $300 to $1,800 this summer in the hopes it will be spent on goods and services. It's being called a tax rebate by some, but unless the Alabama Legislature takes action during the current session to pass an exemption, the rebate will be subject to state income taxation.

Gov. Bob Riley and state lawmakers are keenly aware of this, and they are in a race to see who can pass an exemption bill to spare Alabamians the pain of reporting the rebate on their tax returns next year.

And of course, it's a partisan race.

The first bill has already been introduced - by Democratic Sen. Parker Griffith of Huntsville. Unfortunately for Griffith - and for Democrats - tax bills must originate in the House, so the bill is strictly a symbolic victory.

Riley backed Griffith's bill, but members of his Republican Party were not going to be upstaged by a Democrat.

Over in the House, Republicans got busy with bills of their own. Rep. Greg Canfield, R-Vestavia Hills, introduced a bill on Thursday providing the exemption. But it has Democratic co-sponsors, so the dust of the a short-lived partisan race may soon settle. It appears a certainty that the federal tax rebate will be exempt from state taxes.

What's more troubling, however, is the rebate itself. Most people will accept the rebate and make good use of it, but its effect on the sagging economy will be temporary, at best. And don't look too closely at the budget deficit numbers while you're spending your check.

If President Bush and Congress really wanted to stimulate the economy, and if they don't mind adding to the budget deficit in the process, they could have taken bolder action that would have had a lasting effect not only on the economy but on the nation's crumbling infrastructure.

Devoting tax money to rebuilding highways and bridges and improving aging schools would have been a much wiser investment of tax money. In the process, it would also have created thousands of jobs, which would do more to shore up the economy than a one-time check's-in-the-mail, feel-good gesture.

The interstate highway system is not only in need of repair but expansion. In Alabama alone, interstates are congested in metropolitan areas and don't extend into less developed areas that would benefit from good highways.

Many of the nation's schools are housed in facilities that are in desperate need of repair or replacement. A national building program to modernize schools would pay off in safer facilities and new construction jobs.

But none of that is going to happen, at least not in the remainder of President Bush's term. It might not even happen in the next president's term. Pity.

Meanwhile, your check's in the mail - and it probably won't be taxed in Alabama.