More damaging to the interests of working people in Tennessee is the proposed constitutional amendment that would ban TN from ever having a broad-based income tax. If ultimately passed, it would prevent us from ever lowering the food tax or extracting proportional taxes from the rich. The TN House of Representatives will be voting on the proposal on January 10, 2012. Let your Representative know how you feel about that.
"All taxes reduce consumer spending and put a drag on prosperity...."
You're ignoring the other side of the equation. Without taxes there can be no revenue to support a government that defends our liberties and creates the stable society and economy that make that prosperity possible. Want to try a society with no taxes? Try Somalia.
Why are you advocating class warfare against "welfare slaves"? The poor are poor because our capitalist economic system redistributes wealth to the top (Read Adam Smith). Employers have created a "slave class" so they can exploit it with low wages. They are prolonging the recession so they can reduce wages further.
Tennessee's reliance on consumption taxes is the reason families in the bottom 20% by income pay 11.7% of their income in state and local taxes while those in the top 20% pay 4.5% of their income. You must have a very warped sense of justice if you think that is fair.
That would never pass. Tennessee is and will always be a low-tax state. The article cites our rank as 47 out of 50 states. We are at 7.6%, tied with South Dakota. Nevada with all its gambling revenue is at 7.5% and Alaska with its huge oil revenue is at 6.3%
"Wake up people, we may pay a higher sales tax but at least we do not have to pay a State Tax. I have lived in states that charge a 7 to 8 percent sales tax and then have a 2 to 4 percent state tax taken out of each paycheck. My husbands check alone would have over $300 a month taken out and I know we do not pay that much a month in sales tax."
Assuming a 4% tax rate, $300 a month in taxes means the monthly income must be $7,500 or $90,000 a year. If we assumed a 2% tax rate the income would be $180,000. Using data from the Institute on Taxation and Economic Policy's Who Pays? book, on average families at your income level pay between $3,000 and $3,800 a year in Tennessee sales taxes. The proposal I outlined above would reduce your sales taxes between $800 and $1,200 a year. If you have investment income and pay the Hall Income tax, that would be eliminated and replaced with a broad-based income tax that would be between $2,000 (on $90,000 income) and $5,000 (on $180,000 income). Your total state and local tax bill would change from 4.5%-5.5% currently to 5.5%-6.5%, depending on actual income. That compares to 11.7% for those earning under $17,000 a year (averaging $10,000). That means that after paying state and local taxes they would have $8,830 left to live on. You would have between $85,000 and $168,300 left after state and local taxes. Plus you would have a larger deduction on your federal return for the state and local taxes paid. Tell me again what it is you're whining about. Don't you see your prosperity as in great measure the result of the social and economic stability we all provide for ourselves through our state, local and federal governments?
It's consumption that drives economic activity in the US. Taxes on consumption like Tennessee's sales tax and excise (tobacco, alcohol and gasoline, etc.) taxes reduce consumer spending and put a drag on our prosperity. Jobs are created by consumer demand that leads businesses to hire more employees.
Where does the money the consumers spend come from? It comes from income. Why not tax it at the source? Even the 91% top marginal federal tax rate of the 1950's did not discourage the top earners from earning more. Removing the sales tax on groceries, lowering the sales tax on other items and replacing the revenue with a broad-based income tax (with generous exemptions and graduated rates from 3% to 7%) will increase the buying power of 75% of Tennesseans and unleash the pent-up demand caused by the Great Recession and lingering shortage of jobs.
Was the Amazon deal done lawfully? Does the Governor have authority to waive enforcement of laws already on the books for the benefit of a single taxpayer?
Lib4 is not paying attention. The bill under consideration would only apply to purchases made by Tennesseans.
The TN Attorney General issued an opinion that said the TN and US Constitutions already allow the state to require Amazon and other businesses to collect TN sales tax if they use third-party affiliates in the state to solicit business.
If you live in East Ridge, you can't vote against them. You're not in their district! Our legislators are sworn to act in the best interest of the whole state, not just Chattanooga. On the whole more jobs will be lost statewide because of Amazon's bullying and abetting tax evasion than Amazon will hire.
Sales tax revenue does not go to the unemployed. Unemployment insurance is funded by employers and employees. But sales tax does come disproportionately from lower income families who spend 75% of their income on items subject to sales tax while only 25% of a wealthier family's spending is on sales-taxable items. So a disturbing portion of the unemployment payments goes to pay sales tax rather than to put food on the table.