Alabama is at a crossroads in terms of tax policy. While states like Tennessee and Florida thrive with no state income tax and Mississippi moves to eliminate its income tax, Alabama risks falling behind. Will our lawmakers take bold steps to compete, or will they continue expanding government at taxpayers' expense?
Recently, State Sen. April Weaver (R-Brierfield) introduced a bill imposing a fee on international wire transfers. The stated purpose is to curb illegal immigration and ensure that those utilizing government services contribute their fair share. While I support the intent, let’s be clear – this isn’t just about illegal immigration. It’s about growing government revenue, and Alabama businesses, not just illegal immigrants, will bear the burden. Let’s not kid ourselves – any fee imposed by the government is a tax.
Alabama’s economy is built on global trade, with automotive giants like Mercedes, Honda, Hyundai and Toyota investing billions in our state. This fee will affect them and damage our business environment. Alabama’s automotive industry is a cornerstone of our economy, contributing over $10 billion annually and supporting more than 40,000 direct manufacturing jobs, with tens of thousands more in supplier and ancillary industries. These manufacturers rely on international financial transactions, from paying suppliers to transferring funds for overseas operations. Imposing a tax on these transactions would add an unnecessary financial burden, making Alabama less attractive for future automotive expansion and putting thousands of jobs at risk. We cannot afford policies that make doing business in Alabama more expensive and complicated while our neighboring states remain more competitive.
A Tax By Any Other Name
Americans for Tax Reform (ATR), one of the strongest voices for limited government, has long argued that fees are simply taxes in disguise. ATR President Grover Norquist has consistently opposed wire transfer fees, labeling them revenue grabs masquerading as enforcement measures. In a 2023 op-ed, ATR stated, "For all intents and purposes, this is a 37% tax on Americans seeking to remit funds to their loved ones in other countries."
The same logic applies to Weaver’s bill. If Alabama enacts this fee, it should not be treated as new government income. Alabama does not have a revenue problem – it has a spending problem.
Use It to Cut the Income Tax
If this fee is unavoidable, then let’s ensure every dollar collected is used to phase out Alabama’s state income tax. Tennessee and Florida have already eliminated theirs, attracting businesses and talent. Mississippi is actively working toward the same goal. Alabama must follow suit.
Lt. Gov. Will Ainsworth has made a compelling case for Congress to extend the Tax Cuts and Job Act to support Alabama’s manufacturing sector. But Montgomery shouldn’t wait on Washington. We need to start reforming our tax system now to foster growth.
Rather than using this fee to fund more government, we should allocate 100% of the revenue to cutting the state income tax, starting with relief for small businesses and eventually eliminating the tax for all Alabamians. This kind of tax reform would make Alabama more competitive, helping to retain talent and attract companies that might otherwise look to Tennessee, Florida or Texas.
Shrink Government, Don’t Feed It
The biggest mistake conservatives can make is allowing government to grow unchecked. Too often, even well-intentioned policies lead to ever-expanding bureaucracy. We cannot allow that to happen with this fee.
If Alabama is serious about being a conservative, pro-growth state, then every new tax or fee must come with a corresponding cut. That means setting clear conditions in the legislation:
1. A Dollar-for-Dollar Tax Cut – Every dollar collected from this fee must go directly toward reducing the state income tax. No exceptions.
2. No Government Spending Loopholes – Lawmakers must be prevented from diverting these funds to pet projects or expanding government agencies.
3. A Path to No State Income Tax – This must be a step toward eliminating the income tax, not just a temporary reduction.
If Mississippi can do it, why can’t Alabama?
The Conservative Approach to Taxation
True conservatism is about limiting government and ensuring taxpayers keep more of their hard-earned money. If this wire transfer fee is going to happen, it must be used to reduce taxes – not grow government.
Alabama’s future depends on our willingness to compete with neighboring states. Cutting the state income tax is one of the most pro-growth policies we can pursue. If a wire transfer fee can help achieve that goal, then it is worth considering – but only if it is used to shrink the overall tax burden.
Lawmakers in Montgomery must prove they are serious about fiscal responsibility. If they do, Alabama can become an economic powerhouse, attracting businesses, jobs, and families looking for a low-tax, pro-growth state to call home.
This is our moment – not to expand government, but to make it smaller, leaner, and more accountable to the people of Alabama.
Gerrick Wilkins is an automotive consultant, former congressional candidate, and author of Unshackling Democracy: Embracing Term Limits, Empowering Citizens. Reach Gerrick at gdwilkins@me.com or follow him on X @gdwilkins.
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to Commentary@1819News.com.
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