When looking at Tennessee’s tax policy, it’s clear we have set up a regressive system, one in which working families carry a disproportionate burden in footing the state’s bills.
This is apparent, given the state’s primary mechanism to raise funding: sales taxes.
Sales taxes — which at 58% of Tennessee’s public funding make up a vast majority of state revenue — are widely known, in terms of the effective tax rate on various income groups, to put a greater financial strain on lower-income households.
And of course they do. The less money someone makes, the bigger the portion of their household budget that is going to flat-rate taxes on essential goods and services.
While all states except five institute some form of a sales tax, Tennessee stands out in its usage of it.