income tax

The Chattanooga Times has decided that an income tax is best for the state Tennessee. I cannot disagree anymore vehemently, and I'm not certain why the Times would choose to open this debate again. When our state was facing a similar recession and budget shortfall almost a decade ago, the idea of a state income tax was rejected and has long been considered unconstitutional under the Tennessee constitution. The idea was a knee jerk reaction then just as it is now.

The logic of the argument of the Times is just another example of what has become all too common these days: if there’s a problem, let's have the government throw more money at it to try and fix it. I believe that given time and opportunity and the freedom from the heavy hand of government, the free market has the capacity to fix any financial problems that come our way. I believe that government should learn to live within a budget, just like our families and small businesses must do, instead of raising or creating taxes when they want to spend more of our hard earned money. I believe in less government and more private ingenuity.

Most experts agree that TennCare has already proven to be a financial disaster for our state, yet the Times suggests that we create a new tax on the citizens of Tennessee and pump more money into what has become a financial sinkhole.  If anything, we need less government intervention in our health care system.

They also list a number of programs that will be in financial trouble once federal stimulus funds expire and, therefore, will need financial support from the state. When did it become the norm to expect the government to bail you out if you couldn’t make it on your own? The bigger problem is not programs that are going to run out of government funding but rather the ever growing number of programs that rely on government funding to exist. When a family of 4 hits hard times and has trouble making ends meet, they learn to make sacrifices – not sign up for a new credit card. Our government needs to watch and learn from the hard-working folks across our country and stop this mentality of "spend-our-way-to-prosperity."

Tennessee is one of only a few states in the country with no income tax. This gives us an advantage over other states and allows us to have access to economic growth that they do not have.  Every year, many Californians "go Nevadan" as they move across state lines to Nevada, which has no income tax. In the last year, we have heard about many people in New York considering a move to Florida where no income tax exists and the "disappearance" of hundreds of affluent Maryland citizens that have fled the state to escape its income tax.

Tennessee's economy has been fairly stable during this economic downturn due to our use of a sales tax and not an income tax.  An income tax is not a panacea to a state’s fiscal problems.  States with income taxes are having serious budget problems as well.  In fact, the states with the highest income taxes are having the biggest budget problems – New York, California and New Jersey to name a few.

Although the position of the Times is that the tax should be imposed on the rich, government seldom has the discipline to limit a tax's reach. Inevitably, income taxes "creep" down to the middle class. This is either the result of not indexing the tax to inflation, or that, once a tax is in place, it is an easy way to raise funds for pet projects or fill holes in budgets rather than exercising fiscal discipline. People who work hard to create income are not rich; they are productive. Let's reward such conduct – not punish it.

Being one of only nine states without an income tax has made Tennessee more attractive to companies looking to grow or relocate, and each of those opportunities has lead to tremendous economic growth for our state and has helped us ride out this economic storm much better than many other states. Let's not debate this issue again: Tennessee does not need an (unconstitutional) income tax.

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Bill Smith, Editor: Like most Americans, I identify with Joe the Plumber who wants to work, invest, own and seek the American dream of being successful. But, we are faced with a government that wants to tax our success for working hard to support others who have settled for less - government handouts - and thus live off the labors of "us." I'm not talking about those who can't work or are temporarily down on their luck through no fault of their own. But I am tired of government people, like Sen. Barack Obama, who want to to take my money and then redistribute (give) my money to those who can work to provide for themselves and those under their care. I especially don't like their giving my money to those who made past mistakes, made poor decisions or are just plain are lazy and now want to avoid the consequences of their actions, laziness, mistakes or poor decisions. Also, have you noted that while taxing "us" for working, the government keeps their "operational cut" which tends to grow over time. I join Joe the Plumber is saying Don't tax me for working hard or for having worked hard to save for my family's future!

This past week, 15,677 signatures were filed with the North Dakota Secretary of State's office for the Income Tax Cut Inititiave. Sponsored by the North Dakota chapter of Americans for Prosperity, the initiative, if certified for the November ballot, would slash North Dakota's state corporate income tax rates by 15 percent and the individual income tax rates by 50 percent starting in 2009.

Apparently, North Dakota exepcts a budget surplus of anywhere between $700 million to $1 billion next year, so supporters of the initiative are looking for both tax relief and restrained government spending during these "sunny days." Smart!

But the AARP is opposing the measure because "it would hamper state and local governments’ and school boards’ ability to respond to emergencies or shifting priorities in the future." The North Dakota Farm Bureau is also opposing the measure citing "worries that it would place the burden of spending on increased property taxes." Now maybe North Dakota should start a government "rainy day fund" that is concomitant with this tax cut, but it's amazing what poor excuses are made to not cut taxes. (But I invite any North Dakotans to explain why voting Yes on this inititiave would be a bad idea.)

This will be the second income tax related ballot initiative this year, joining the Massachusetts Income Tax Repeal. While well intentioned, the Massachusetts initiative is a bit extreme as it would completely get rid of the 5.3% tax on wages.

With so much focus on the national economy during this presidential election cycle, there has been a lot of emphasis on the candidates' tax and economic growth policies. Folks in the broader national conservative movement need to realize that not only do local and state taxes have just as much of an effect on the economy as national taxes do; state and local tax, budget, government transparency, and other localized bread and butter issues can help build our farm team, as previously discussed.