Tennessee -- like the federal government -- is having some money and job problems. Unlike the federal government, Tennessee can't just run up more debt. So the organization called Tennesseans for Fair Taxation has offered some extensive proposals that it claims would cut some taxes and create more jobs, which it suggests would create more tax collections.
Here are some of the organization's suggestions:
* Eliminate the state part of the sales tax on food -- but leave the local option sales tax on food unaffected.
* Cut the state sales tax on non-food items from 7 percent to 5 percent.
* Eliminate the Tennessee "Hall Income Tax," with "unearned" income that currently is subject to the Hall tax becoming subject to a new broad-based state income tax with generous exemptions, with a 3 percent rate on the first $30,000 over the exemptions, and a 6 percent tax on amounts over that.
* Reduce state and local taxes for those in the lowest 20 percent of the population by income from 11.7 percent to 9.7 percent, for the middle 20 percent reduce the rate from 9.3 percent to 8 percent, and for the top 20 percent raise the tax from 4.5 percent to 7 percent.
The increase on higher-income taxpayers would affect savings but would have little effect on spending, the organization claims.
* Benefit businesses by removing the real estate-base from the franchise tax and cutting the rate in half.
* Close some loopholes used by large multistate companies to minimize their Tennessee tax liabilities.
The Tennesseans for Fair Taxation group says the proposed additional revenue would avoid state employee layoffs, avoid cuts in critical state functions, ease the recession and assist recovery.
It claims, "Applying the revenue estimates done in other states that have considered a switch to 'combined reporting' to Tennessee suggests that Tennessee could collect $100-$200 million additional revenue."
These proposals -- if enacted by the Tennessee General Assembly -- would affect a great many individual Tennessee taxpayers and a great many businesses "for better or worse." They should be considered very cautiously. They are not simple. So we thought you ought to know about them.
Tennessee needs sufficient pay-as-we-go state taxing -- at levels that will encourage full employment of our people and generate greater prosperity for all Tennesseans. Achieving such a balance is not easy.
You're right, it 'sounds' good but further inspection would unearth major problems. One problem with the "fair taxation" mantra above, is there are no Gov't cutbacks. Tennessee, like all other states operates with a bloated bureaucracy that needs trimming, in every department. The Feds do not want to cut useless departments and useless jobs, they just create more. Same with our states. The problem is-that as a result, we have way too much waste and fraud, way too many lazy bureaucrats not doing the job they were paid to do. And way too many state bankruptcies looming.
Fair taxation? The top 20% taxed more, sounds great if one is into the "Social Justice" doctrine. But many of those top 20% are business owners who will not hire more workers if they pay too many taxes. We are already taxed way too much-on everything and there is no relief in sight. Where is the fairness when our so-called Leaders are spending our children's and grandchildren's futures into oblivion?
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