Why We Need an Income Tax

Sen. Bill Borah's 1909 treatise on the topic is enlightening.
An excerpt:
"The income tax is the fairest and most equitable of the taxes. It is the one tax which approaches us in the hour of of prosperity and departs in the hour of adversity. Certainly, it will be conceded by all that the great expense of government is in the protection of property and wealth. There is no possible argument founded in law or morals why these protected interests should not bear the proportionate burden of government."
Borah also explains that the income tax and not the sales tax, can ensure that a family's basic needs are met. The income tax is levied only after one's family has been fed, children's educations have been secured, and expenses have been met. A sales tax, on the other hand, is levied on the goods we must buy to feed our children, to educate our children, and to care daily for our families. A compelling read!!

Amazon should be required to collect sales tax in TN

TFT has supported and continues to support the revenue-generating measure of sales tax collection on online and out-of-state sales. In 2011, we promote the Out-of-State Sales Tax Act to ensure the state collects this much needed revenue (approximately $300 million) and to boost local, small businesses who are currently at a disadvantage due to this disparity in tax enforcement that gives big retailers an unfair advantage.
But for Amazon, the game has changed with their distribution centers in Chattanooga and Hamilton County, for which they already received a more-than-generous incentive package.
See the full story in today's Tennessean here:
http://www.tennessean.com/comments/article/20110129/BUSINESS01/101290348/Amazon-shouldn-t-get-free-pass-stores-say
To join TFT and the burgeoning movement of local businesses asking Amazon to collect the sales tax, go here and copy and paste the following or your own message into the Message Box:
"Please support local businesses and revenue enhancement in Tennessee by supporting the Out-of-State Sales Tax Act and by requiring Amazon to collect sales tax now that it has located a distribution center in the state. This could bring approximately $300 million in much-needed revenue to Tennessee - a solution we can't afford to ignore as we face an ongoing revenue crisis and residents have been faced with cuts in programs and services just when we need them the most.
Amazon should be a good corporate citizen and follow the same rules our small, local businesses are required to follow. I would appreciate your support of progressive revenue enhancements like the Out-of-State Sales Tax Act and your efforts to ensure Amazon is required to collect sales tax. Thank you."

No on the Hall Income Tax phase-out

A bill (SB0033 by Burks/HB0046 by Sexton) has been introduced in the legislature to reduce the “Hall” Income Tax over time and eliminate it by 2015. Another bill (HB0122 by Sargent/SB0108 by Johnson) has been introduced to increase the amount of income exempted from the “Hall” tax to reflect inflation up to a maximum exemption of $2,500 for individuals or $5,000 for persons filing jointly.
In the Hall Tax, Tennessee actually has an income tax named after its 1929 sponsor. The 6% rate applies only to income derived of dividends from stocks and interest on bonds. Currently, the first $1,250 per individual or $2,500 per joint return is exempt. Since 2000, those exemptions were increased to $16,200 and $27,000 respectively for those over 65. Certain blind persons, quadriplegics, prisoners of war and several technical situations are completely exempt from the tax, as detailed in Title 67, Chapter 2 of Tennessee law (see http://www.tennessee.gov/revenue/taxguides/index.htm).
This tax is collected by the state, but more than one third of it is returned to the city or the county in which the taxpayer lives.
Legislators and the public rightfully believe that this tax is especially hard on retirees and others on fixed income. The current tax is counterproductive in encouraging saving and in attracting additional retirees to the State. However, with the current budget shortfalls in state and local governments, we cannot afford to lose in the range of $200 million in revenue per year without at least replacing it with a more appropriate revenue source.
Tennesseans for Fair Taxation proposes to replace our over reliance on a high sales tax, also hard on all persons on fixed or modest income, with a broad based tax system which will actually reduce taxes for 80 percent of Tennesseans. The solution includes:
♦ lower sales tax,
♦ no sales tax on food and
♦ a broad based tax on income with generous exemptions and modestly graduated rates.
Such a system could be designed to result in most Tennesseans paying less in state taxes while raising sufficient revenue to prevent most of the cuts in services and jobs anticipated in coming budget years. To learn more, visit www.fairtaxation.org or contact us.

Meet Out-of-State Sales Tax national ally : Alliance for Main Street Fairness

From the Alliance for Main Street Fairness :

Amazon.com’s plan to open and operate a distribution center in Tennessee sounds goods when the mega online-only retailer emphasizes the jobs it would create. But local communities ultimately would pay the price. As part of the deal, Amazon wants special treatment so it can avoid collecting sales taxes on purchases.

That approach would put the burden of paying taxes directly on Amazon consumers, and it would put Main Street businesses at a price disadvantage. That’s bad for the state, and that’s why today our client, the Alliance for Main Street Fairness (www.StandWithMainStreet.com), announced new print advertisements that will run this week in The Tennessean.

“This new advertisement by our coalition highlights that citizens in Tennessee should be very pleased that Amazon is interested in establishing new distribution facilities but very concerned with the fact they are demanding special treatment, which would allow them to avoid collecting the sales tax in spite of the fact that small businesses in the state are required to do so,” alliance executive director Kristin Anderson said.

“The issue is one of basic fairness, and allowing Amazon to exploit a loophole means small businesses in the state will continue to operate at a competitive disadvantage, producing fewer, not more jobs,” she added. “And Amazon’s actions expose Tennessee citizens as they are required to track and remit the sales tax due to the online-only retailer’s failure to do so.”

The print ad will run in The Tennessean through the end of the week. To view it, click here

Important background:

● Number of jobs the retail industry provides In Tennessee: 309,000
(Bureau of Labor Statistics , accessed 1-25-2011)

● Number of jobs Amazon facility would create: 1,500 full time, 2,200 part time
(Dave Flessner, “Should Amazon Buyers Pay Sales Taxes?” Chattanooga Times Free Press, 12-5-2010)

● Tennessee’s estimated sales-tax revenue loss for fiscal 2012: $748.5 million
(National Conference Of State Legislatures , accessed 1-25-2011)

Tennesseans have the right to know how online-only retailers are hurting local communities by exploiting tax law. We hope you will tell others about this issue and prevent Amazon and other online-only retailers from gaining an unfair tax advantage.

Thanks in advance for your time.

TFT 2011 Lobby Days

It's important to let your representatives know how you feel about Tennessee's budget deficit and the need for revenue to avoid devastating cuts to our public structures. A lack of funding affects all social issues, including affordable health care, quality public education, access to higher education, environmental conservation, mental health services, public safety, and more. If you care about these issues, you care about revenue.
TFT will be on Capitol Hill in Nashville throughout the 2011 legislative session advocating for tax modernization to boost revenue and quality of life for all Tennesseans., We'd love to have you join us! We offer trainings on effective policy advocacy, and we offer carpooling - go here for a full schedule of our 2011 Lobby Days and feel free to contact us if you have any questions!

Close Corporate Tax Loopholes to Boost State Revenue

TFT member Phil Schoggen wrote a great op-ed for the Tennessean in December on corporate tax loopholes in Tennessee that hurt local businesses and allow up to $300 million in potential revenue to slip through our fingers. TFT is working in the 2011 legislative session to close corporate tax loopholes through the Tennessee Small Business Protection Act.
To read the full article, go here

Welcome to the TFT Blog!

Tennesseans for Fair Taxation works to create a more fair and progressive tax structure that ensures adequate revenues for the benefit of all Tennesseans. TFT works through education, coalition building, and grassroots organizing among diverse groups and individuals.
We hope this blog will provide a resource for our members and the public to share information, news, and research on Tennessee's budget and revenue needs, progressive taxation, and economic justice. We look forward to hearing from you!