Tennessee Gov. Bill HaslamWith the start of a new session of the Tennessee General Assembly, Gov. Bill Haslam has spelled out a series of important issues he would like lawmakers to take up, ranging from education to efficiency in state government.
One of the most vital subjects he wants to see addressed is taxes. He has proposed reducing the sales tax on food from 5.5 percent to 5.3 percent, with the aim of dropping it to 5 percent within three years. That would directly benefit virtually all Tennesseans.
He also wants to raise the exemption on the death tax on estates from $1 million to $1.25 million. The tax is unjustly imposed when a person dies — on assets that have already been taxed. But there is also a practical economic reason for exempting more of a person’s assets from the death tax — and for eventually doing away with the tax entirely. As the governor noted recently, by imposing a death tax, Tennessee is “literally chasing capital away from the state.”
While there may be a short-term reduction in state revenue from reducing the death tax, one study suggests that Tennessee actually lost $7 billion in tax revenue over the past decade because of the death tax, which drives some retirees and potential economic development to more tax-friendly states, such as Florida.
Because of the death tax, “People are starting businesses other places besides here,” the governor said.