Tennessee fortunately has no general state income tax. We should amend our state constitution to head off any possibility that we ever will.
We say Tennessee doesn’t have a “general” income tax because, while we do not have an income tax on ordinary salaries and wages, the state unfortunately does levy a tax on income from stocks and bonds — the so-called “Hall income tax.”
But the Tennessee Senate wisely voted 28-5 on Wednesday to amend the state constitution specifically to prohibit imposing any general tax on income.
The purpose is to keep Tennessee attractive to our people and to businesses that are here, and to others proposing to locate here, thus creating more Tennessee jobs.
If the state House of Representatives agrees with the Senate — as it should promptly — the proposed ban would also need to pass both houses by a two-thirds vote in the next legislative session, starting in 2013. If it passes then, it would go on a statewide ballot in 2014. If it gets that far, a general income tax prohibition should be overwhelmingly approved by Tennessee voters.
“I think we have a lot of support in the House,” said Sen. Brian Kelsey, R-Germantown, who sponsored the legislation.
Despite multiple state Supreme Court rulings that a general income tax is constitutionally impermissible in Tennessee, the stated goal of the proposed amendment is to “clarify the language by which the Constitution of Tennessee” now forbids such a tax. The idea is to head off any possible “confusion” by which lawmakers might seek to impose the tax — as some have tried to do in the past.
All of us are subject to U.S. income tax law. But Tennesseans should be eager to prohibit a general Tennessee income tax. The House should follow the Senate’s approval of the proposed ban, both houses should again approve the ban in 2013, and voters should readily approve the general income tax prohibition in 2014.
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Tennessee does not have a general state income tax. Nor should it.