Tennessee does not have a general state income tax.
Nor should it.
The lack of such a tax can be a vital incentive in attracting both businesses and highly skilled workers to Tennessee. A number of states have imposed burdensome taxes, and have regretted it. Just last year, a Boston College study found there had been a mass exodus of wealth from New Jersey in the years after it raised a host of taxes, including income taxes. Many residents fled to lower-tax states. And those who left were more likely to be better educated, creating a "brain drain" that further harmed New Jersey.
Commendably, a measure has been introduced in the Tennessee General Assembly to amend Tennessee's Constitution specifically to prohibit a general state income tax. The constitutional amendment should be adopted.
You'll notice that we repeat the word "general" to describe the kind of income tax that Tennessee does not have. That's because although there is no Tennessee tax on income from salaries and wages, such as the federal tax code imposes, there is a Tennessee tax on dividends from stocks and interest on bonds over $1,250 a year.
It is called the "Hall income tax." It got that name from the state senator who proposed the tax, which was enacted in 1929.
The rate of the Hall income tax is 6 percent.
But could the Tennessee General Assembly someday impose a general income tax on Tennesseans' salaries and wages? After all, lawmakers have occasionally tried to do that in the past, despite multiple state Supreme Court rulings against such a tax.
Well, to be sure that no general income tax on salaries and wages might easily be imposed, state Sen. Brian Kelsey, a Republican from Germantown, proposes that the Tennessee Constitution be amended to prohibit in explicit terms a general income tax.
Amending the constitution is difficult, and was made so on purpose, to avoid spur-of-the-moment changes.
How difficult? Well, read the relevant "legalese" in the state constitution and decide for yourself.
It says: "Any amendment or amendments to this Constitution may be proposed in the Senate or House of Representatives, and if the same shall be agreed to by a majority of all the members elected to each of the two houses, such proposed amendment or amendments shall be entered on their journals with the yeas and nays thereon, and referred to the General Assembly then next to be chosen; and shall be published six months previous to the time of making such choice; and if in the General Assembly then next chosen as aforesaid, such proposed amendment or amendments shall be agreed to by two-thirds of all the members elected to each house, then it shall be the duty of the General Assembly to submit such proposed amendment or amendments to the people at the next general election in which a governor is to be chosen. And if the people shall approve and ratify such amendment or amendments by a majority of all the citizens of the state voting for governor, voting in their favor, such amendment or amendments shall become a part of this Constitution. When any amendment or amendments to the Constitution shall be proposed in pursuance of the foregoing provisions the same shall at each of said sessions be read three times on three several days in each house."
Adopting an amendment to explicitly block a general Tennessee income tax would clearly be difficult -- and is thus very unlikely. But on such a vital issue, it is worth the effort.
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