The Chickens Come Home to Roost for Tennessee's Sales Tax
The upside to Tennessee's lack of an income tax is that politicians get to crow about how we're a small government, low tax state, etc., etc. The downside is that it's just a shell game, merely shifting those burdens over to "user fees," as Ronald Reagan liked to call them, or our absurdly high sales tax rates. And now comes word that the state may be losing hundreds of millions of dollars because of it all.When your sales tax can reach the lofty heights of 9.75 percent, it has a way of encouraging people to buy out of state -- especially when it comes to big ticket items. So long ago, Tennessee passed a law mandating that residents buying stuff elsewhere still had to pay the difference in sales tax back home. It sounds like a swell idea in theory, save for two naturally occurring phenomena: People will always avoid taxes if they can, and the government would have to do a whole lotta spying to enforce the rule. Which means that no one's actually paying.
And according to the Associated Press, that's costing the state a rather handsome pile of jack. Joe Huddleston, executive director of the Multistate Tax Commission, said unpaid use taxes total "tens of millions, if not hundreds of millions of dollars in lost tax revenue for Tennessee."
The losses will only get bigger as the depression becomes more severe. But the natural solution--creating an income tax to lessen the sales tax--would require political courage, which was last heard from in a text book in 1972.
Comments
this is not a depression. you disrespect those who lived through the actual depression when you say it is. missed any meals lately?
oh, and do you actually think TN would drop the sales tax if they passed an income tax? dream on. do the initials D.P. mean anything to you?
Posted 12/02/2008 at 08:49:16 AMThe last thing this state needs is an income tax. I hate the 9.25% as much everyone else, but passing an income tax is not a cure-all.
Posted 12/02/2008 at 08:54:29 AMI almost hope the total irresponsibility of the TTR crowd, in which the Republican style of proving anti-government bona fides by abdicating the responsibilities that state governments are supposed to manage, destroys this state so badly that the Republicans are ruined for generations. Hey, it worked for Bush and the national Republicans, didn't it?
I pay 9.75% on frickin' everything. It sucks. The liars who claim that the sales tax would be preserved are either Rich Uncle Moneybags and his fellow yacht club members, or nutjob ideologues. CONSTITUTIONALLY, the state sales tax would be capped. The idea is to even out the revenue stream. Tennessee has two choices: being like North Carolina, or being like Mississippi. The GOP wants to make us into a kudzu-covered banana republic.
Posted 12/02/2008 at 09:07:03 AMI think the knuckle-walkers deserve what they are about to get. What an embarrassment that McCain won this state and that knuckle-walking republicans like Donna Rowland now control both houses of the legislature. This is going to be a real circus!!!
Posted 12/02/2008 at 09:58:32 AMI grew up here, live here, and love it. But there are some bassakward people who have used rightwing theology to push for brutally stupid economic and social policies.
Again, we're teetering between being a state with an educated population with decent jobs, moderate taxation, and a good quality of life, and a weirdo plutocratic theocracy where rich jerks get poor white people to give them low taxes while simultaneously feeling good about sticking it to blacks, Mexicans, gays, city folk, bus riders, and other assorted oddballs.
Posted 12/02/2008 at 11:10:04 AM"The downside is that it's just a shell game, merely shifting those burdens over to "user fees," as Ronald Reagan liked to call them, or our absurdly high sales tax rates."
Actually the income tax system is more of a shell game than the sale tax system is. It allows more people to escape paying anything for the government services they are getting.
"The losses will only get bigger as the depression becomes more severe. But the natural solution--creating an income tax to lessen the sales tax--would require political courage, which was last heard from in a text book in 1972."
First off, we aren't in a depression.
Second, creating an income tax is no more of a "natural solution" than is cutting back on government spending and involvement in things that was never any of it's business to begin with.
All a state income tax would do is give govermnent even more money to waste and they would waste no time in wasting it - as has been clearly evidenced by the states that DO have an income tax - like California.
California's income tax has put them in such great shape that they are begging the feds for a loan and people are running out of the state as fast as they can go to escape the onerous taxation and government regulation there.
Posted 12/03/2008 at 07:40:39 AM