published Tuesday, March 27th, 2012

Tennessee tax breaks and racism

The Tennessee Legislature's Republican bent to favor the wealthy and appease racists has rarely been so obvious. Consider the Legislature's actions last week on two specific bills -- one to dismantle the inheritance tax on estates of more than $1 million, the other to block the merger and integration of Memphis City and Shelby County school districts.

Helping Tennessee's most affluent residents by phasing out the state's inheritance tax was originally proposed by Gov. Bill Haslam, but Republic lawmakers seem equally eager to please the well-heeled crowd -- no doubt, in part, because that's where the bulk of their campaign donations originate.

Eager-beaver lawmakers

Haslam has proposed to terminate the high-end inheritance tax over five years beginning in 2013, with each incremental step being paralleled by minuscule deductions in the state's sales tax on food. Eager-beaver lawmakers in the House last week accelerated the phase-out schedule to four years, which at that point would mean the complete loss of a state funding source that now amounts to $90 million a year.

This is malevolently misguided. The state's inheritance tax begins on estates of $1 million, but the bulk of its inheritance tax revenue comes from far larger estates valued in the multi-millions of dollars. The cut would certainly boost the fortunes of Gov. Haslam's family, whose ownership of the Pilot Oil empire is worth billions of dollars.

Regressive taxation

In a state that relies more heavily than any other state on sales taxes -- the most regressive form of taxation -- this gratuitous tax break for the wealthy and the super-rich would simply add insult to injury. The less that average Tennesseans earn, the higher the proportion of their income that goes to state sales taxes. The regressive nature of the state's tax system in a state classified as a low-wage state is already stunning. In a state that levies no general income tax, taking away the inheritance tax on high-income families makes Tennessee's tax structure even more regressive.

The inheritance tax should not be eliminated. Revenue from it should be channeled, for example, to keep the Taft juvenile center open, and to restore cuts in services for the intellectually challenged, and in TennCare.

A significant portion of Tennessee's lawmakers care as little for racial equity as for tax fairness. When the predominantly black Memphis city school district began moving two years ago to voluntarily dissolve its school district into the richer Shelby County school district by 2013, Shelby County's legislators got the Legislature to consider a bill to dissolve the state's long-standing ban on new municipal school districts. Never mind that the ban was established years ago to promote racial equity by curtailing fragmentation of integrated countywide school systems.

Bill is stalled

The bill would have let Shelby County racists in the small towns of Arlington, Bartlett, Collierville, Germantown and Lakeland put a referendum on the May 10 ballot to create their own municipal school systems before the Memphis/Shelby school merger. Fortunately, the bill was stalled last week by two events. First, the state attorney general ruled the bill would be illegal before the Shelby County-Memphis school merger occurs. Second was former House Speaker Jimmy Naifeh's impassioned plea to stop a bill clearly designed to maintain racial segregation in Memphis-area schools.

Both bills are now awaiting other committee hearings. Transparency and soul-searching in the cause of tax equity and racial fairness should prompt their demise.

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AndrewLohr said...

Has any Times reporter talked to anyone in the five towns? Can you name one actual racist?

March 27, 2012 at 12:40 a.m.
328Kwebsite said...

As an intermittent reader of the Commercial Appeal, I don't feel this editorial captures the sophistication of the problems with school redistricting in Memphis.

Take the budget for the new school district, for example. There will be the same number of students, yet the school systems propose to slash 92 teaching jobs and refuse to pay about $500,000 in computer software licenses. How is that an improvement in schools?

As with other school budget crunches, the first to fall will be the school janitor. 75 school janitors and 21 behavioral specialists will lose their jobs. Three elementary schools will close. The same number of students will remain in the system, but receive fewer services. How is that an improvement in schools?

Meanwhile, there has been a much stronger outcry than a speech from a state legislator. It doesn't take a lot of imagination to see that a school merger could be a good idea that turns sour in its execution. Notice how similar the stinks are to our own school system troubles with politicians.

March 27, 2012 at 6:12 a.m.
joneses said...

I find it disgusting the liberals think it is the governments right to confiscate the inheritance of families hard earned life time efforts upon the death of a loved one.

These wealthy people you say are benefiting from not merging the Memphis school districts. They will not be affected one way or the other because their children do not attend government schools, they go to private schools where they get an excellent education.

This article is a perfect example of the liberals spreading hatred of another group of people.

March 27, 2012 at 6:50 a.m.
timbo said...

Austin does it again. He writes the most uninformed, race-baiting, editorial possible. He is a "drive by" propagandist.

First of all is the headline..."Tennessee Tax Breaks and Racism." This makes it look like the two are linked. Is is racist to want to keep your own money?

The inheritance tax is the most egregious, dishonest, transfer of wealth to people who don't earn it that exists.

Since Harry has never produced on thing in his life except for some emergency toilet paper or fish wrapping material. Stealing people's money while calling it a "tax" is still stealing money.

March 27, 2012 at 2:48 p.m.
timbo said...

Austin does it again. He writes the most uninformed, race-baiting, editorial possible. He is a "drive by" propagandist.

First of all is the headline..."Tennessee Tax Breaks and Racism." This makes it look like the two are linked. Is is racist to want to keep your own money?

The inheritance tax is the most egregious, dishonest, transfer of wealth to people who don't earn it that exists.

Harry has never produced on thing in his life except for some emergency toilet paper or fish wrapping material. Stealing people's money while calling it a "tax" is still stealing money.

March 27, 2012 at 2:49 p.m.
Variable374 said...

O.K. I have held off on commenting on these silly articles by this guy for a while, but I have to post a response to this one. It's obvious and apparent by this person using generalities, he's trying the "Over There, there are racists, or whatever" mob mentality tactic to misinform the uninformed South East Tennessean on his silly point of view. Tax Breaks are not stealing money, taxing people is stealing their hard-earned money! Oh, I shutter to imagine what your worldview is like if you write an article and at the same time draw some odd correlation between tax breaks and racism, and schools! Are there any Klansmen in the Shelby County suburbs outside of Memphis burning crosses in the night? I don't see any, that would surely make Foxnews. A metropolitan area's right to create their own municipal school district is ultimately up to that municipality, or so it will be with this state legislation. I was not born in Germantown, but I lived there for much of my life, and I can say that I am offended that you are actually allowed to write articles for the newspaper in this uninformed and blatently uneducated manner, get a real job!

March 27, 2012 at 3:13 p.m.
LaughingBoy said...

This is horrible. Where do I begin?

First, the misleading-these towns aren't Sale Creek or Charleston in population as "small towns" would have you believe. Germantown, 38,000; Arlington, 12,000; Bartlett, 54,000; Collierville, 44,000; Lakeland, 12,000. Anyone not knowing better would think of the stereotype of cars on blocks in the front yard and it's nothing of the sort.

Next, the libel about it being a racist decision: First, here's a comment from the Memphis Commercial Appeal:

"The obvious conclusion is that a system of 46,000 students is a much smaller system than one with 150,000 students.

SCS (Shelby County) was small enough, and local enough to produce good results.

We do not believe a consolidated system of 150,000 students can produce better results. That is the real reason."

For some reason I can't post the newspaper link but the story and comments can be easily found under "Pressing the Issue". Many more comments have the same reasoning. It's not about race, it's about the inept Memphis, billion dollar school system forcing its way onto the more successful county schools.

Finally for Mr Austin, any others thinking it's a segregation attempt. Statistics easily found at the Tennessee Department of Education website relate the figures: Germantown High School, 46 percent black, 44 percent white; Houston High School, 68 percent white, 20 percent black; Bolton High School, 45 percent black, 49 percent white; Collierville High School, 13 percent black, 80 percent white (similar to the overall population); Millington High School, 56 percent black, 36 percent white. These schools are already diverse and there seems to be no complaining about them or "wanting the blacks out". Another example of race-baiting.

You owe those against the Memphis School System takeover an apology.

March 27, 2012 at 3:19 p.m.

Agreed -- but in addition to owing municipal district supporter in Shelby County an apology, an even bigger one is owed to the readership of the Times Free Press. It's clear that whoever wrote this didn't bother understanding the timeline of events, finding out what is already illegal or not, or even so much as actually reading the AG opinion, considering what's reported here is not actually what the opinion said. Shoddy excuse for journalism. Editorials are to give your opinion on what facts mean, not your distorted opinion of what the facts are.

March 27, 2012 at 4:12 p.m.
Griff64 said...

Even a polemicist has the duty to acquaint himself with basic facts before tarring 100,000 Shelby County residents as racist. The fact is, the Shelby towns pursuing MSDs are expressly seeking to retain all the students in all the affected schools, maintaining the racial balance alluded to above. But why let facts interfere with a good screed?

The phrase "homeless man's Glenn Greenwald" comes to mind to describe this writer, but that's an insult to both Greenwald, who does at least a modicum of research before he chucks his bombs, and the homeless

March 27, 2012 at 9:41 p.m.
LaughingBoy said...

Still no follow up. Horrible.

March 30, 2012 at 2:29 p.m.
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