May 29, 2007

Up in Smoke

Despite Tennessee's $1.3 billion surplus, Gov. Phil Bredesen wants to raise taxes on not just cigarettes but also on the propane used in barbecue grills, reports The Tennessean at the start of the summer outdoor grilling season. The Knoxville News Sentinel had the story yesterday, and the excerpt provided by Ben Cunningham gives more details about the legislation. While The Tennessean story looks only at the tax increase the Bredesen administration is seeking on propane for barbecue grills, the News Sentinel looks at another tax increase sought by Gov. Bredesen, one that will cost Tennessee businesses millions of dollars.

The Knoxville paper informs readers that both tax increases are included in House Bill 2296, which it describes as placeholder "caption bill" on taxes awaiting the Bredesen administration's 150-page amendment - an amendment which "is not yet available on the Legislature's Web site."

There's no telling how many tax increases are stuffed into the 150-page revenue amendment because the Bredesen administration hasn't released it to the public - and won't until the last possible minute. Many legislators will vote on the amendment without fully understanding what they are voting on. Indeed, the Bredesen administration last year showed a willingness to deliberately mislead legislators about what they were voting on, when it mislead them about the true cost of a "technical change" to the tax code that ended up in the state giving $64 million of your tax dollars to Nissan to relocate its American headquarters from California to Tennessee.

The Bredesen administration will delay releasing the tax-raising amendment as long as possible, to keep legislators and the public in the dark as much as possible. Legislators should respond by slow-walking the legislative process and poring over the document with a fine-tooth comb, looking for more hidden tax increases and corporate welfare.

You can follow the progress of the Bredesen administration's 150 pages of changes to the tax code here.

Update: Tom Humphrey at the Knoxville News Sentinel reports today that the 150-page revenue bill includes a myriad of new tax breaks for business.

A new package of business tax credits and incentives proposed by Gov. Phil Bredesen's administration is designed to keep in-state companies from leaving while luring more out-of-state corporations to move their headquarters and high-tech operations to Tennessee, says Revenue Commissioner Regan Farr.

The proposals are part of a 150-page bill that makes an array of changes in Tennessee's tax code that was prepared by the state Department of Revenue. It will be filed this week in the House and Senate Finance Committees, Farr said in an interview.

Update: Ben Cunningham comments: "[Bredesen] doesn't want to give taxpayers a break on their groceries but he sure wants to tax your propane grill gas and hand out tax funded welfare to corporations."

Now, I'm not against tax breaks for business per se. I'm not against lowering taxes for any taxpayer - individual or business - although I would prefer across-the-board cuts and a loophole-free tax code.

But for the last three months the Bredesen administration has told the people of Tennessee that, despite a $1.3 billion revenue surplus, it just can't figure out how to "pay for" reducing the food tax by even half a cent, which would cost the state a mere $39 million. And yet, while they've been working hard in public to defeat food tax reduction proposals, they've been working harder in secret, private meetings with the business community on a package of big tax breaks for business.

Tennessee has a $1.3 billion revenue surplus, and yet Gov. Bredesen won't even consider cutting the sales tax on your hamburgers. In fact, he wants you to pay higher taxes just to grill those burgers - while he doles out big tax breaks to business.