Tag Archives: income

Lamar Says a State Income Tax is Coming (well, maybe)

News release from Sen. Lamar Alexander:
WASHINGTON – In a speech today on the floor of the United States Senate, U.S. Senator Lamar Alexander (R-Tenn.) called on his colleagues to pass the Marketplace Fairness Act, a bill introduced with Senators Mike Enzi (R-Wy.) and Richard Durbin (D-Ill.), and “close a 20-year loophole that distorts the American marketplace by picking winners and losers, by subsidizing some businesses at the expense of other businesses and subsidizing some taxpayers at the expense of other taxpayers.”
Alexander said: “In Tennessee, where we don’t have a state income tax, we want to avoid one. ‘State income tax’ are probably the three worst words in our vocabulary, and collecting tax on sales from everybody who owes it could not only reduce our sales tax but help us avoid a state income tax.

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Ramsey, McCormick Statements Found False by Politifact

Two fairly recent comments by legislative leaders are deemed false in recently-posted items on Politifact Tennessee.
From Lt. Gov. Ron Ramsey: “This year’s redistricting has been the most open, interactive and transparent redistricting process in Tennessee history.” (Direct link: HERE)
From House Majority Leader Gerald McCormick: The state constitution “clearly says there’s not to be a state income tax in Tennessee.” (Direct link HERE)

House Approves Constitutional Income Tax Ban 73-17

NASHVILLE, Tenn. (AP) — Opponents of a proposed constitutional amendment to ban an income tax in Tennessee say it’s unnecessary and politically motivated.
The measure sponsored by Republican Rep. Glen Casada of Franklin was approved 73-17 on Thursday. The companion legislation passed the Senate last year, and Republican Senate Speaker Ron Ramsey of Blountville said he plans to bring it up at the beginning of the next General Assembly.
The proposal must now be approved by a two-thirds vote in each chamber of the next Legislature before it’s placed on the ballot in 2014.

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Haslam: First Step in Cutting Inheritance Tax is a ‘Big One’

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — Raising Tennessee’s estate tax exemption by $500,000 would cost the state about $23 million in lost revenues, according to projections by Gov. Bill Haslam’s administration.
The inheritance tax currently applies to estates worth more than $1 million, and was paid in 845 instances in the last budget year.
Haslam has said he agrees with fellow Republicans in the Legislature who want to chip away at the estate tax because it “chases capital away” by discouraging retirees from living in Tennessee.
But the governor warned that the state’s finances aren’t strong enough to afford reductions in either the estate tax or the Hall tax on interest and dividends.
“In this difficult time we still have expenses that are larger than our revenues at this point, so it’s hard to figure out how we would do that, because we have to make that budget balanced,” he said.
Republicans in the Legislature are nevertheless pressing to reduce one or both of the taxes as they gear up for their re-election campaigns.

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Turner Calls for Repeal of Hall Income Tax

News release from House Democratic Caucus:
NASHVILLE (December 16, 2011) – House Democratic Caucus Chairman Mike Turner of Old Hickory, called Friday for a repeal of the Hall income tax in Tennessee.
The individual income tax is imposed on individuals and other entities receiving interest from bonds and notes and dividends from stock.
“The Republican majority has said they want to cut taxes and I think they should support this legislation and also produce a balanced budget,” said Turner (D-Old Hickory). “I am calling upon all my colleagues in the House Republican Caucus to sign on to this bill.”
Enacted in 1929, the tax was originally called the Hall income tax for the senator who sponsored the legislation. The law can be found in Tennessee Code Annotated in Title 67, Chapter 2.
Current exemptions include: persons over 65 with total income less than $16,200 for a single filer or $27,000 for a joint filer.
The rate of the tax is 6 percent of taxable income.
“I hope my friends on the other side of the aisle will help me pass this legislation to lower the tax burden on Tennesseans,” Turner said.
The tax is expected to garner roughly $204 million in the coming year.

Ramsey, Harwell Ready to Move Ahead on State Tax Cutting

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — Republican leaders in the General Assembly plan to forge ahead with efforts to reduce the state’s inheritance and Hall income taxes despite Gov. Bill Haslam’s concerns that Tennessee’s economic situation isn’t healthy enough to make up for the lost revenues.
Senate Speaker Ron Ramsey told The Associated Press on Tuesday that he wants to take an incremental approach toward getting rid of the Hall tax on income from interest and dividends.
“I think it is doable,” the Blountville Republican said. “Obviously I think we should wait a little longer before we say ‘no’ to something like this.”
Meanwhile, Republican House Speaker Beth Harwell of Nashville said in a phone interview she wants to focus on cutting the state’s inheritance tax.
“I respect that the governor has concerns about filling potential budget gaps, but House Republicans have wanted to address this issue for a long time,” Harwell said
“The fact that we don’t have an income tax has done wonders for the state,” she said. “The Republican caucus just wants to move that ball down a little bit further and work on specifically the death tax.”

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Haslam’s Federal Tax Rate Averaged 13%; Went Low as 4.8%

Back when he was willing to provide some figures on his income, Bill Haslam was understating the percentage of that income paid in federal taxes, according to the Commercial Appeal’s Marc Perrusquia.
Haslam released a summary of his non-Pilot income during the 2010 gubernatorial campaign for a six-year period ending in 2008. (He has refused to release any information on his income since then.)
The summary, when analized, shows that Haslam paid such a low rate of taxes on non-Pilot income that it “provides fodder for an emerging national debate over how federal income tax policy benefits the rich,” Perrusquia reports.
Haslam’s summary reported he paid $3.8 million in federal taxes and $597,000 in state taxes on his non-Pilot income over the six-year period.
This, the summary said, amounted an effective tax rate that averaged 22.35 percent over the six years and reached 48 percent in two of those years.
However, Haslam’s non-Pilot tax rate is much lower when isolated to federal taxes and calculated in a manner typically used to compare tax rates. For one, Haslam calculated his tax rate by using taxable income, not total income. Taxable income is lower than total income because itemized deductions and personal exemptions have been subtracted.
Using taxable income inflates a tax rate, said Nick Kasprak, an analyst for the Tax Foundation, a nonpartisan Washington-based tax research organization.
“That is nonsense,” Kasprak said. “It’s misleading to do that. There are a lot of tax deductions people can take. If you’re not including those in your income you’re inflating your tax rate.”
Haslam said his personal CPA computed the tax rates published in his income summaries using an accounting software by a leading national firm. The software divides taxes paid into taxable income, he said.
However, using Kasprak’s method, the newspaper found Haslam’s effective federal income tax rate (on non-Pilot income) averaged 13.1 percent over the six years and dipped as low as 11.7 percent in 2007 and 4.8 percent in 2008.

There’s some commentary from the governor on the matter.
“I’m not sure that this is a case of somebody that’s trying to dodge taxes,” said Haslam, emphasizing that much of his federal tax deduction involves huge charitable contributions he’s made, plus state taxes he paid.
Renewed interest in Haslam’s finances comes amid a flourishing national debate over taxes and wealth.
Spurred in part by the Occupy movement, the debate is gaining currency, too, among conservatives influenced by the likes of billionaire investor Warren Buffett, who says the wealthy don’t pay their fair share of taxes. A report this fall by the nonpartisan
Congressional Budget Office fueled the debate by finding a growing income inequality between the middle class and America’s richest citizens.
“There is a bigger gap there, that’s true,” Haslam said. “So the question is: Why? … Is it solely tax policy? Is that what’s driving the difference? Or are there a lot of other factors at play? And I think that’s the discussion we should be having,” he said, suggesting that inadequate education and the breakup of the traditional family might also be factors in the growing income gap.
“The easiest thing to say is, ‘Well, there’s the super rich. And the ‘one percent’ is doing well.’ ”

Haslam: It’s Not the Time to Cut Taxes

By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — Gov. Bill Haslam says he doesn’t plan to eliminate Tennessee’s estate tax and Hall income tax despite efforts by several Republican lawmakers to kill the measures because they believe they’re hurting the state’s economic development.
The Republican governor told The Associated Press that both taxes are bad for the long term because they “chase capital away from the state.”
However, he said Tennessee is still in tough economic times and he doesn’t have a way to replace that revenue.
“I don’t think either one of those really are helpful,” Haslam said Thursday. “Right now it’s just hard to figure out how we’re going to replace those.”

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TFT Plans ‘Untax Groceries, Tax the Wealth’ Rallies

News release from Tennesseans for Fair Taxation:
Tennesseans across the state are invited to celebrate their First Amendment rights by peacefully assembling in a Statewide Day of Action Nov. 12. The “Untax Groceries! Tax the Wealth!” Day of Action will urge Tennessee Representatives to oppose a Constitutional amendment to permanently ban an income tax in Tennessee.
“Our present state tax system is immoral, unfair and bad for our economic future. It hurts the middle class and the poor. We have one of the highest sales taxes on groceries and other items in the nation. That costs us jobs and revenue that could strengthen education, health care and public safety in Tennessee.” Elizabeth Wright, director of Tennesseans for Fair Taxation (TFT), says.
“But instead of our State Legislators passing a solution that would help those of us in the middle class, they are fighting for a Constitutional ban on an income tax to protect the wealthiest Tennesseans from paying their fair share of taxes,” Wright added.
“Everyone who wants large corporations and the wealthy to pay their fair share of taxes so we can have more jobs and most Tennesseans can pay less in taxes should join us on November 12. We also want to celebrate the rights to free speech and peaceful assembly that were so bravely defended for us all by Occupy Nashville protestors Oct. 28,” says Dick Williams, TFT board chair. “The income tax ban is irresponsible and short-sighted. It would tie the hands of future legislators in accessing viable revenue options. Advocates of this ban have no idea what the future might hold for our state.”
The schedule of events includes Knoxville, Nashville, and Memphis as shown below:
Knoxville: Sat. Nov. 12, 2011 – 2 p.m. to 5 p.m. at the UNITE! Building, 1124 N. Broadway
Memphis: Sat. Nov. 12, 2011 – 3 p.m. to 4 p.m. with press conference at City Hall, 4 p.m.
Nashville: Sat. Nov. 12, 2011 – 10 a.m. to 4 p.m. at Legislative Plaza with Occupy Nashville
The mission of Tennesseans for Fair Taxation since 1984 has been to end the sales tax on food and to create a more fair and progressive tax structure that ensures adequate revenue for the benefit of all Tennesseans.

Bill Haslam ‘Borrowed’ Ernie’s Ethics

Satirist Scott McNutt lampoons Bill Haslam, Ernie and Bill Gibbons in a Sunday piece that starts like this:
Gov. Bill Haslam recently revealed that a story he often tells about his wife’s high school boyfriend, “Ernie,” was “borrowed” from another politician — possibly former President Bill Clinton. Now, he says his administration’s standards of openness and transparency are borrowed, too.
Haslam has long warmed up audiences with a story about meeting Ernie, the former boyfriend who’s now a convenience store clerk. The punchline is that Ernie would now be governor if Crissy Haslam had married him instead of Haslam.
At a press conference last week, after refusing to divulge details of his personal finances, Haslam admitted that the standards of openness and transparency his administration has claimed to hold are actually those of “Ernie,” if Ernie had become governor.
In 2009, Haslam released a summary of his income for 2003-2008, excluding that derived from Pilot (all his investments save his Pilot-Flying J holdings are now in a blind trust). But last week, the governor declined to reveal current information, saying, “Any commitment I made to open government wasn’t my personal commitment.”
“You lied about it?” asked a reporter.
“I borrowed it,” the governor answered. “My administration’s commitment to transparency, and in fact, any vow or claim of integrity I may have made are really Ernie’s.”
When it was pointed out that Haslam had already admitted stealing “Ernie” from Bill Clinton, Haslam replied, “That’s right, and we all know Clinton’s ‘openness’ depends on what the meaning of ‘is’ is. So my secrecy about my income ‘is’ his fault.”
Haslam then said when he issued an executive order calling for more openness in state government on his first day in office, it was what Ernie would have done. However, when Haslam signed another order allowing him and his top aides to reveal fewer details of their private incomes than their predecessors, he was pretty sure that was him, not Ernie. He added that he frequently confuses the two.
“Given these revelations, governor, is there anything at all authentic about your commitment to openness?” another reporter asked.
“Probably not, because I seem to have left it in the blind trust with my non-Pilot investments,” Haslam replied. “Still, my insincerity is genuine.”