We shop Costco every week, eat free snacks, and look forward to chance meetings with friends—many we haven’t seen in years.
We buy food, eye glasses, clothing, computers, televisions, tires—our house is stocked with Costco products.
But on October 1st, something bad happened at Costco.
Costco is located in Hoover and Hoover increased its sales tax.
Suddenly, Costco, the company that tries to keep prices low—had a price increase.
Of course Costco wasn’t at fault—Hoover increased taxes at the Galleria, at Patton Creek, at every restaurant, grocery, and retail store in the city.
There’s nothing shocking about Hoover’s sales tax increase–both Homewood and Vestavia Hills recently upped their sales taxes. In fact, Hoover’s sales tax increase was more moderate than its neighbors— ½% vs. 1% for Homewood and Vestavia Hills.
Are we okay with increased taxes?
Alabama is supposed to be a state where we hate taxes, but when sales taxes are increased there appears to be very little push back.
Hoover brags it hasn’t had a sales tax increase in almost a quarter of a century.
But why should we ever have a sales tax increase?
Companies increase prices and blame it on inflation. Inflation is not the problem with sales tax. In fact, inflation causes sales tax to go up automatically. A sales tax increase is just an additional tax on top of an inflated sales tax.
Alabama is a sales tax nightmare
According to USA Today, Alabama has the highest local tax rate in America—states like Delaware, Montana, New Hampshire, and Oregon have no sales tax at all.
And Alabama, its counties, and municipalities fully tax groceries–one of only seven states to do so.
There are other options than tax
I strongly feel we’ve reached the upper limit on how much sales tax is acceptable.
Would you be happy to pay 11 or 12%?
Instead of competing with one another, our city and county governments should sit down like adults and find ways to share services.
With 35 municipalities, we have 53 fire departments, 24 police departments, and a sheriff’s department. The Jeffco sheriff’s department alone has a budget of almost $66 million in addition to the 24 independent police departments.
Garbage trucks—each hired by a different city—pass one other every week in the same neighborhoods.
We have 13 independent emergency call centers in Jefferson County. Vestavia Hills has saved $3.7 million since it outsourced its call center five years ago.
And our cities have spent at least $200 million in the past 20 years stealing businesses away from one another.
This is a head scratcher
As I wrote earlier, Alabama is one of only seven states that fully tax groceries.
Hoover Mayor Frank Brocato told me when Hoover was evaluating a sales tax increase; he was going to recommend eliminating sales tax on groceries. He said he was told by his legal department that the state would not allow it.
Next time you buy groceries, pay your check at a restaurant, or make a purchase at a retail store, take a look at how much you pay in sales tax.
Tell your elected officials that enough is enough.
Let’s turn Birmingham around. Click here to sign up for our newsletter. There’s power in numbers. (Opt out at any time)
David Sher is Co-Founder of AmSher Compassionate Collections. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
Invite David to speak to your group about a better Birmingham. firstname.lastname@example.org