Haslam's proposed cuts in sales, death taxes make sense

Haslam's proposed cuts in sales, death taxes make sense

January 12th, 2012 in Opinion Free Press

It is encouraging that Gov. Bill Haslam is promoting cuts in the sales tax on food and in the unjust death tax on inheritances. We have to pay taxes to provide for the necessary functions of government. But taxes should be few, low and fair.

The governor proposes that lawmakers first cut the sales tax on food from 5.5 percent to 5.3 percent. Over a period of three years, the goal is to cut the tax to 5 percent.

"[I]f we're going to lower taxes for Tennesseans, that's the only way to touch every Tennessean in a significant way," the governor said.

His focus on the death tax is also appropriate. He proposes raising the exemption on the death tax from $1 million to $1.25 million. The idea would be to increase the exemption to $5 million over time. That would be a good start that should eventually lead to the elimination of the tax. The money in question has already been taxed -- repeatedly in some cases. It should not be taxed yet again when it is passed on after a person's death.

Concerned about lost revenue, Haslam initially was hesitant about reducing the death tax. But he acknowledged in an Associated Press interview that the death tax as well as Tennessee's Hall income tax on bond interest and stock sales "chase capital away from the state" -- harming our economy long term.

In endorsing a death tax cut, he pointed out that it was made possible by some increases in other revenue and by careful stewardship of state money.

The governor's tax relief proposals should be enthusiastically supported by Tennesseans and promptly enacted by the General Assembly.