There were some eager press reports this week proclaiming that the state legislature had just voted to lower taxes in Tennessee. The truth of the matter is nothing to cheer about. R. Neal lays out the math:
"... to summarize, the 0.1% get a $20,000 tax break and everybody else gets a $3.50 tax break. How very Republican!"
Just watch - this legislature will send out re-election campaign shouts of "We Lowered Taxes!"
I stand to benefit financially from this law, but I still really object to it. It's just a stupid way to fund our state services. You know what would make sense? A state income tax. Have a state income tax that's revenue neutral with today's revenue when the state sales tax is dropped really, really low. Tennessee is a long and skinny state with a lot of state line compared to area. There are a lot of people in other states who would drive to Tennessee to shop in stores that charged a low, low sales tax. Businesses would make more money. They'd hire more people. Tennesseans would make more money, and they'd pay some of it in state income tax, but they'd still be happy because they'd be coming out ahead.
ReplyDeleteWhy is that so hard?
Actually, Tennessee currently bleeds huge amounts of sales tax revenue over the state line, because 5 out of 6 of its major metropolitan areas are on the border, and it's a simple matter for folks to cross over to states with lower sales or even no sales tax on things like food.
ReplyDeleteNot to mention how much we're losing out to on-line sales.