People like to say Tennessee has no income tax, but that’s not true. Eighty-five years after it was imposed at the urging of Sen. Frank Hall on the eve of the Great Depression, the so-called Hall Income Tax continues to chip away at Tennesseans’ nest eggs with an onerous tax on dividends and interest.
It’s a yearly tax on the good habits of savings and thrift; it keeps retirees, job creators and venture capitalists from coming here; and it is riddled with exemptions that favor politically active corporations over others and distorts the free market.
We ought to repeal it.
There’s an old saying that if you want to discourage something, tax it. By that reasoning, the Hall Tax discourages savings and thrift by taxing the interest and dividends on your savings and investments.
From the standpoint of the tax, you’re better off blowing your money than saving it: the tax will only affect you if you save.