By Chris Butler | Tennessee Watchdog
NASHVILLE — Members of a Tennessee-based nonprofit say government has no need to streamline itself, and they direly predict drastic cuts in government services if voters in November support Amendment 3, which bans state income taxes.
Tennessee currently doesn’t have a state income tax, but State Sen. Brian Kelsey, R-Collierville, who spent three years navigating the proposed amendment through the Tennessee General Assembly, said the amendment is still needed.
“Our last six attorneys general have all written opinions that we could have an income tax in Tennessee and voting yes on 3 will forever prohibit an income tax. This will put the final nail in the coffin,” Kelsey said.
“This will ultimately bring more jobs to Tennessee by allowing us to tell prospective employers that not only do we not have an income tax, but we will never have an income tax. This will improve the economy.”
But John Stewart, an at-large member of Tennesseans For Fair Taxation, which, according to its website, educates residents about funding public services, calls the amendment “a politically-motivated gimmick.”
“There’s no evidence that it will bring more jobs to Tennessee,” Stewart said.
“I was in charge of economic development for the Tennessee Valley Authority, and we were actively involved in recruiting companies to Tennessee. I never had one company raise the issue of income tax as to whether they were going to come or not. The one issue they always cared about was a skilled and trained workforce through our colleges.”
Amendment 3, Stewart said, will lead to double-digit increases in the state sales tax, as well as increases in property, food and business taxes, while also leading to further cuts in government services.
“The future of Tennessee hangs in the balance,” Stewart said, adding that teachers need cost-of-living increases.
TFT Board Chair Dick Williams, meanwhile, said members of the very state agency that collects taxes — the Tennessee Department of Revenue — needs more taxpayer money to have up-to-date computers.
Tennessee Department of Revenue spokeswoman Kelly Nolan Cortesi said Tuesday, however, that all employees already use equipment less than four years old.
Couldn’t one make the argument government could operate more efficiently with less money?
Stewart doesn’t buy into the argument government is often bad about waste, fraud and abuse of taxpayer money.
“This is an argument that you hear forever all over the place, but it’s very hard to prove,” Stewart said.
“Sure, you can find individual instances where someone did something dumb. But you can do that anywhere. It happens all the time in private business, for goodness sake. Government is not that much different from private business in terms of how it handles its money.”
Nevada and Texas already have similar amendments, Kelsey said.
While Tennessee has no general state income tax it does have what is known as the Hall Income Tax, a 6 percent income tax on dividends from stocks and interest on certain bonds.
State officials enacted the Hall Income Tax in 1929, according to the state’s official website.
Contact Christopher Butler at [email protected]
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