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September 21, 2004

Poll: Tennesseans Oppose State Income Tax

Today's Tennessean reports the results of a statewide poll, which shows 53 percent of registered voters in Tennessee oppose the creation of a state income tax even if the state's sales tax was reduced. Only 35 percent favor it. These would be the 35 percent of the state's population who believe the lie that the legislature would not later re-raise the sales tax.

I would be interested to know the results of a good poll on support for a single-rate state income tax if it came coupled in a true reform package via an amendment to the state constitution that also included eliminate the state sales tax forever, capping the local-option sales tax at 3 percent, and instituting a Taxpayers Bill of Rights that would do the following:

  • Limit the growth of state spending to a rate sufficient to account for population growth and inflation.

  • Require public approval via referendum of any legislative plan to exceed the spending growth cap

  • Require surplus revenue be reserved for a "rainy day" up to a certain percentage of the budget, and then require surplus revenue be returned via tax rate reductions.

  • Require public approval via referendum of tax increases or new taxes.
  • I suspect that, if voters were to be explained the details of such a package, they would give it far more support than the most recent proposal for a temporary reduction in the sales tax, an uncapped income tax, and no brakes on the growth of state spending. I've written more - much more - about the Taxpayers Bill of Rights concept in a series of posts archived here.

    Posted in Tennessee Budget & Tax Policy | Linked By |
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    Comments

    Tennessee doesn't need a state income tax! If Bredesen were to succeed in fleecing us with an income tax the proceeds would simply lead to more govt bloat and wastefull programs. If the sales tax were eliminated at the state level the local municipalities would simply raise their rates. Raising taxes of any kind in TN is bad. We'd be better served lowering taxes.....

    Posted by: Mike King at September 21, 2004 03:47 PM

    Read my whole post, Mike. All of your concerns are addressed. Local sales taxes are capped, the growth of government spending is capped, and surplus funds are off-limits to legislators without approval by voters.

    Posted by: Bill Hobbs at September 21, 2004 04:38 PM

    Forgot the mention, also, that the proposal I outline would cause taxes to fall as surpluses triggered rebates or rate reductions.

    Also, I believe the proposal would enhance the state's economy and make it a retail mecca for the region, boosting the economy and boosting the sales tax coffers of local governments, reducing the upward pressure on property taxes.

    Posted by: Bill Hobbs at September 21, 2004 06:17 PM

    Once a tax system is established there is only one way for the rates to go. As for the protections mentioned, how long before some tax friendly state of Federal judge ruled the protections unconstitutional. If an income tax were to replace the sales tax I'd trust it only if it was at a fixed rate which could only be altered by a two thirds majority of voters with the safeguard that the rate could not exceed 50% of the existing rate and could not be increased again for at least 20 years.

    Posted by: Thomas J. Jackson at September 22, 2004 10:35 PM

    A judge can not declare a clearly-written provision of a constitutional amendment to be unconstitutional.

    I'd write the entire tax reform package as a constitutional amendment, not as statutory legislation, and put it to the vote of the people.

    Posted by: Bill Hobbs at September 24, 2004 01:04 PM
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