Regressive Taxation 101

The Daily Kos has this great article on regressive taxes - the same message TFT has been sharing for years, and will continue to share until our upside-down tax structure is turned rightside up and provides a level playing field for low- and middle-income families and enough revenue to adequately support our public structures we all need to grow and thrive in our state.
Some excerpts:

More than 80% of Americans are burdened more by state and local sales taxes alone than they are by income taxes. Only for the top 1% of earners do income taxes take a greater percent of their income than sales and property taxes.

Why is this? Because most Americans do something really interesting with the money that comes their way: they spend it. They buy food. They buy clothes. They buy toothpaste, toys, tool chests and toilet paper. Through that spending, they create demand. What doesn't get spent on consumables gets turned into the kind of long term assets that most people need to get by in the world. It turns into a roof over their heads and transportation to get to work. Which creates more demand. More jobs.

By spending their money, the majority of Americans fuel the health of the economy. They're the juice in the system. The churn. The fire in the boilers.

Meanwhile, up at the top end of the scale, those top 1% of earners don't neither spend their income or turn it into property. They don't consume it. They don't convert it. They just sit on it. This chart alone is enough to demonstrate that cutting the tax for those at the top is worse than pointless. The very rich are not turning their money into things / demand / jobs. They have so much more than they need that their money is simply stagnant. Sending them more cash would be no more effective than throwing it into a volcano.

Unfortunately, those spending and converting actions that most Americans engage in are attacked by regressive systems that hit from dollar one. These are not invisible taxes. They're all too visible. They're part of every transaction, large or small. They're the reason your dollar bag of pretzels can't be purchased with a dollar. They're the reason that new Chevy or Ford costs you extra both when you buy it and every year you own it.

The overall impact of eliminating sales tax and most income tax deductions is that over 80% of Americans would pay less tax and the tax directly eliminated would be the one they face every day in their transactions.


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Gov. Haslam Weighs In On Amazon.Com Controversy - NewsChannel5.com | Nashville

Amazon losing in the South

Forbes columnist Janet Novack has another great column about Amazon's bad business practices and how states are standing up to their bully tactics.
Tennessee may be the next state to stand up and demand that Amazon play by the same rules as our local businesses in collecting the sales tax as is their legal obligation.
Sen. McNally and Rep. Sargent, the chairs of the Senate and House Finance Committees, have introduced an amendment to SB0529/HB0136 to clarify that sales made by "persons" using or having any facility, sales room, warehouse, distribution center, etc., located in TN are subject to collecting the TN sales tax. This amendment is a direct challenge to Gov. Haslam's announcement last week that Amazon is receiving a special exemption from sales tax collection requirements. Today, the House Finance subcommittee approved the amendment to HB 136, and TFT applauds the move.
The exemption would effectively throw away $35 million in revenue from sales tax on Amazon purchases made in Tennessee. TFT has opposed this exemption and advocated for the Out-of-State Sales Tax Act (SB1489/HB1912) that would require any vendor selling more than $4,800 in goods annually to Tennesseans to collect and remit the sales tax on those purchases. The exemption and lack of legislation mandating sales tax collection for online and out-of-state purchases not only loses significant revenue, but also harms local businesses that are so important to job creation and community investment in Tennessee.
Please join TFT in contacting the members of the House and Senate Finance Committees who will consider this amendment and let them know you support it and wish to end special exemptions and tax breaks for corporations in Tennessee. We need revenue with justice for all Tennesseans.