Wednesday, March 4, 2009
Kotz / Legislature / Politics / Presidential Politics Now's the Time for Democrats to Push a State Income Tax
Posted by Pete Kotz on Wed, Mar 4, 2009 at 5:49 AM
Following the presidential election, even the most liberal of liberals would admit that while the rest of the country was changing -- in a big way -- Tennessee was not. Obama was crushed here, and Republicans could have taken over the legislature if not for Democratic scheming and their own ineptitude.
But scroll forward just a few months. As the economy gets worse, you find Tennessee beginning to reflect the mood of the rest of the nation. Republicans continue to plummet in the polls, perhaps because their only idea for a renewed economy is more tax cuts. As MTSU notes, "only 24 percent (of Tennesseans) say congressional Republicans are doing enough to cooperate with Obama."
This, my friends, this is what political geeks refer to as a sea change. Which means it's time for a charismatic, enterprising Democrat to put an end to Tennessee's system of Plantation Economics...
Think about it: What better populist issue is there than the income tax? For years Tennesseans have been voting against their economic interests. Republicans were better at selling fear than Democrats were at selling equity. The sales tax forces normal people to pay a much greater percentage of their income, and we have the highest food tax in the country. Meanwhile, it forces us to have a Third World government, where education is perpetually underfunded, and the governor is even considering blowing off federal stimulus money to the jobless, though we already have one of the most miserly unemployment systems in the country.
Can anyone really be in favor of this?
But conventional wisdom says the people are stupid, that they'll only respond to gays, guns, God, etc. The MTSU polls says otherwise. It suggests that people are far more worried about putting food on the table, finding work, making ends meet. They're so into it, in fact, that a liberal black guy has far higher approval ratings than the troglodytes of the legislature.
Call it class warfare if you will, but now seems the perfect time to ride this mood. The state's Republicans offer little more than liberalized gun laws and tax cuts, and seem incapable of offering anything else. By contrast, Democrats have something meaningful to offer: economic equity.
Yes, it would take an eloquent, brave, charismatic pol to make the case. And, no, there's not a statewide Democrat commonly associated with any of those traits -- especially the bravery part.
But what if, dear reader. What if...
Comments (35)
Showing 1-35 of 35
Chip Forrester and his income tax forces continue their work. His Democrat legislators introduce bills to create an income tax. Now his capitol city liberal alt-weekly editorializes on the need for an income tax. Forrester is working, and will continue to work, this issue.
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I knew it! I saw Chip and Pete together at Bongo Java yesterday. I thought at the time, "They look like they're up to no good, possibly plotting some kind of conspiracy."
"For years Tennesseans have been voting against their economic interests."
You haven't accomplished anything in your life that proves you are a superior judge of anyone else's economic interest than they are themselves.
Pete, you filthy commie! How DARE you suggest that the people of Belle Meade, Williamson County, Germantown (Shelby) and Farragut pay their fair share of state government? Don't you know we're supposed to worship them because they were smart enough to pick their parents and be rich?
Really, Pete. Logic and reason just do not work in Tennessee.
Isn't it interesting that no one was talking about an income tax until Chipper became Democrat chair? Since then, bills are being filed, editorials are run.
Coincidence?
Ahhhhh, now Chipper dispatches his shills - Left Wing Cracker, Sean Braisted, and benintn - to lay down the arguments for an income tax.
So, LWC, is just class warfare, huh? State constitution be damned.
The problem is that every one of those in the 44% who oppose an income tax will drag their ass out of bed to vote against anyone who supports it, while the passion in favor of progressive taxation is quite a bit more muted. Or, at least I think that is what Chip told me to say...
"Pete, you filthy commie! How DARE you suggest that the people of Belle Meade, Williamson County, Germantown (Shelby) and Farragut pay their fair share of state government?"
If tax payments were based on fair share, then 99% of those people would get a tax cut.
Fairness in paying for government goods and services is no different than fairness in paying for private sector goods and services - on a user fee basis.
And most of those folks (and an lot of others as well) are already paying more in taxes on an absolute dollar basis than the dollar value of government services they are personally receiving back in exchange for their money.
Percentages of income has nothing to do with it. No ones income is a "service" that has been provided to them by the government.
I completely agree, Sean. Why then does Chipper continue to push this issue? Does he like tilting at windmills?
Far as I can tell, Forrester hasn't had anything to do with the issue, sans some references to a resolution he supported back in the 90s. To the best of my knowledge, this blog post was written by the editor of the Nashville Scene. I'm guessing that he's had opinions before he came to work at the Scene, and will have them if and when he ever leaves.
Or, because the economy tanked, our resources dried up, and generally a new taxation system is discussed when we don't have the revenues to sustain our budget.
I mean, I don't mean to diminish the awesome power of Chip the Magnificent, but perhaps people do things for reasons absent the Chair of the TNDP.
So you, Sean, admit that you are the second Tennessee Democrat Party shill blogger to publicly advocate for a state income tax. Left Wing Cracker is already on the record. Can benintn be far behind?
Granted, the environment is right for the pro-income taxers to crawl out of the woodwork, but I think it's no coincidence that the pro-income tax TNDP executive committee elected an outspoken income tax advocate as chair and barely a month later Democrat legislators begin a push in the General Assembly.
I also don't think it's any coincidence that you and Cracker are now defending an income tax.
I am if it will help pay for the adult literacy classes you so desperately need apparently. Where in those comments did I say I supported a State Income Tax? Not saying I do or don't, but I don't recall stating an opinion on the matter in this thread.
I don't think it's a conspiracy perpetuated by Chip Forrester, Heatseeker. Everyone's not a troll or a shill for the Democratic Party. I'm pretty sure reasonable people can come to this conclusion on their own, though you may not agree.
I also could be completely wrong. As Sean notes, the anti-tax guys are more adamant and more motivated to vote. But I do believe that, judging from the MTSU survey, Tennessee's a lot more forward thinking than the pols give it credit for. I also think we underestimate how badly people are hurting these days. And pain leaves them open to new ideas. Two years ago, no one would have believed that a black guy could be elected president. Maybe we're all still underestimating how much the world has changed.
So my guess -- yeah, it's just a guess -- is that people might be prepared for an income tax if the case can be made that it brings about a more stable government, cuts the tax on necessities like food, and provides better funding for things like education. Look at all the cities best positioned in the new economy, and they uniformly have good schools and good public universities. It's as much an economics/jobs issue as anything else.
Tax reform is perfectly reasonable, of course. It would take a really strong leader and a few million dollars worth of TV ads to persuade a majority of Tennesseans that it makes sense. But even then, once they're convinced of that, they still might oppose it because they could never be sure the goofballs in the legislature wouldn't keep raising the rate for all sorts of absurd purposes.
"people might be prepared for an income tax if the case can be made that it brings about a more stable government, cuts the tax on necessities like food, and provides better funding for things like education. Look at all the cities best positioned in the new economy, and they uniformly have good schools and good public universities. It's as much an economics/jobs issue as anything else."
Meanwhile back in the real world, the states with income taxes are not doing one bit better economically than the ones without them.
As for the "stability" of tax revenue, go check with the New York City officials about that.
Here's what Bloomberg had to say recently:
"One percent of the people that live in the city, the households that file in the city pay something like 50% of the taxes. In a city that's about 40,000 people so, you know, a handful left, any raise would make it revenue neutral. The question is, "What's fair?" If one percent are paying 50% of the taxes, you want to make it even more? A little over half the people, half the households who file tax returns don't pay any taxes. And about 30% of the households that file get a credit from the government. The government sends them a check. That's the Earned Income Tax Credit."
You start concentrating the tax base in fewer and fewer high income people, you are making things less stable - not more.
All they have to do is pick up and move somewhere else and then government revenue takes a dive.
Indeed, Tennessee's tax structure is so out of date that if it were an actual tangible item it might be worth more sold as an antique! Tennessee's schools, healthcare system, infrastructure etc...all of these things and more are hurting and have been hurting well before the national economic issues occurred. It is high time that we stop over taxing the most economically challenged, under-taxing the wealthiest citizens and thusly yielding insufficient tax revenue from this inequitable system. Perpetual underfunding of Tennessee has
undermined and weakened Tennessee's ability to uplift it's citizens. Except of course, those that can afford to pay for (yet pay the least percentage of taxes) private schools, private security, and the finest of healthcare. I'll bet, however, that those same people drive on tax funded roads, enjoy the same liberties guarded by our tax funded judicial system and etc. Its time Tennessee becomes a viable competitor amongst the 50 states instead always watching from the sidelines.
It IS time for a better tax policy in Tennessee, whether the Democrats or Republicans do it. I am glad to see an initiative in the legislature, and hopeful that the truth may finally sink in—cutting sales tax and instituting a state income tax will mean more money in Tennesseans pockets (now there's a stimulus package we can live with!).
Come on, conservatives. Instead of a knee-jerk reaction to the bills before the legislature take a look at them and do the math. Almost every one of us will pay the government less—the only ones who may see their taxes rise are those who can well afford it.
We've lived with a regressive tax policy that requires the unemployed and the poor to pay the same as the wealthy for too long.
Virtually every economist and common sense tells us the progressive income tax has distinct advantages over a sales tax, which is why most states and the federal government use it. It reduces taxes on the lower and lower-middle classes, it is less subject to the whims of economic fluctuation and is simply fairer for the poorest of us who pay an almost 9% surcharge on food. Poor people don't need fewer calories to survive than rich people do. The current system is borderline insane. Yes, people have been voting against their own self-interest on this issue, plain and simple. Most people in TN would pay less under many of the income tax/sales tax reduction plans out there. Who would vote against keeping more of their money and helping poor people buy food? I just can not understand the anti-income tax argument.
Anonymous said, "Meanwhile back in the real world, the states with income taxes are not doing one bit better economically than the ones without them."
Tennessee is always fighting to be at the bottom of any good comparison and the top of any bad comparison of quality of life among the states:
Unemployment as of February, 2009: #1
Number of prescription drugs taken per citizen: #1
Violent crimes (a reflection of poverty and lack of education): #2
Infant Mortality (babies dying unnecessarily): #6
Obesity (One in four of us is way too fat): #6
Number of Citizens Below Poverty Level: #10
Number of Mobile Homes: #14
Number of Citizens (per capita) with college degree: #41
Best Education: #41
Household Income: #43
Health of its Citizens: #47
And these things all relate to how Tennessee can fund elementary, secondary and college education and healthcare. Collectively, the Sales Tax as a way to fund the state government has left us poor, stupid and sick. Obviously, the other states are doing a better job than we are, and they're doing it with a progressive income tax. (Except, perhaps Wyoming and South Dakota which each have a smaller population than Greater Nashville, and who have huge incomes from coal mining and banking & gambling, respectively.)
By the way, Mayor Bloomberg was referring to a New York City Income Tax of 4%, which is the only city income tax in the nation. Let's keep it real.
Don't blame Chip Forrester for the Tax Modernization and Economic Stimulus Act. That was completely the initiative of Tennesseans for Fair Taxation over strenuous opposition from Democratic Party leadership in the General Assembly. Anyone who says this is a Democratic Party initiative is un- or mis-informed.
I think a number of cities actually have income taxes, Bill. We had them in metro Cleveland, even the suburbs, and I believe Detroit has them too. They're an accounting nightmare, especially if you work in one city and live in another. But you're right: The only states that seem to survive without them are the ones capable of gouging some major natural resource or thrive off gambling. Which could mean that... we should be launching the South's biggest gambling industry?
Those who love to brag about our low-tax state will also be proud of other stats which reflect our dismal condition:
Tennessee is:
3rd lowest in nursing home ratings;
5th highest in premature deaths. TN has 9.0 per 1000 births; US rate is 6.3;
4th lowest in overall health;
5th highest in the prevalence of smoking; 24.3% of Tennesseans smoke;
11th lowest in funding for state tobacco prevention programs;
3rd lowest in spending per capita: $3,969.
I could go on and on but you get the picture. Because we have no money - low taxes - we have an abominable health care system along with high taxes on food and clothing - those consumable items without which no one can live. Elimination of the food tax, reduction of the general sales tax, combined with a graduated, progressive IT would mean an additional billion dollars of revenue and a reduction in the state taxes paid by 60% of Tennesseans. Come on Legislators, do your duty.
This is one of those cases where it appears that the people vote against their best interest. However, Tennesseans have never voted on this issue. The issue of an income tax, which is the fairest way for providing funds for a civil society, has been dominated by a few loud voices.
Some people are proud that Tennessee is a low tax state. However, we need to realize that because of this Tennessean don't receive the level of services that most states provide:
Health Indicators
1. State ranks 4th lowest in overall health. (United Health Foundation, 12/08)
2. State ranks 5th highest in the prevalence of smoking. 24.3% of the population smokes.
3. State ranks 11th lowest in funding for state tobacco prevention programs.
4. State ranks 4th highest in the prevalence of obesity. 30.7% of the population is obese.
5. State ranks 11th highest in infectious diseases.
6. State ranks 8th highest by rate (per 100,000) of reported syphilis cases, 9th for Chlamydia cases, and 10th for gonorrhea.
7. State ranks 4th highest in cardiovascular deaths.
8. State ranks 6th highest in diabetes-related deaths (per 100,000.)
9. State ranks 4th highest in cancer deaths.
10. State ranks 5th highest in premature deaths. If TN were a country, it would rank between Latvia and Costa Rica. The US rate is 6.3 per 1000 births; TN has 9.0 per 1000 births (12/2008.)
11. State ranks 6th highest in the percent of population with a disability.
12. Tennessee residents use more prescription drugs than any other state in the nation -- an average of 17.3 prescriptions for every individual, compared with 11.3 prescriptions per individual nationwide.
13. TN ranks 7th worst in indicators of women's health, such as major causes of death, preventive care, and health insurance coverage (CDC).
Health Care Indicators
1. State ranks 8th highest in teen births per 1000 women (15-19 years.)
2. State ranks third lowest in nursing home ratings. One-third of its nursing homes received the worst rating possible, according to the Centers for Medicare and Medicaid Services (12/2008.)
3. State ranks 5th highest in preventable hospitalizations.
4. In the past five years, the rate of uninsured population increased by 33%.
5. State ranks 10th in the highest percent of its population receiving Social Security Beneficiaries disability payments
I have saved the best for last:
Tax Burden
1. State ranks 11th lowest in property tax burden.
2. State ranks 3rd lowest in spending per capita: $3,969
3. State ranks 8th lowest for having the lowest tax rate applied to the top 1% in income relative to the national average. (ALEC, 2008)
4. State ranks 9th lowest in property tax burden. (ALEC, 2008)
5. State ranks 5th lowest in business and property taxes.
When I put all of this together, I realize that Tennesseans have been robbed.
How much more do families in Tennessee have to go without while at the same time make many very rich?
"The issue of an income tax, which is the fairest way for providing funds for a civil society"
Bullshit.
The fairest way to pay for government goods and services is on a user fee basis the same as it is in the private sector.
No one has any fundamental "obligation" to subsidize anyone else's existence.
McDonalds can't get away with charging the "rich" $500 for Big Macs so it can give hundreds of them away to other people for free.
If McDonalds can't get away with doing that, there's no reason government should be able to get away with doing the equivalent.
The principle is exactly the same in both cases.
When I came to Tennessee in 1961, a few residents, including especially Andy Holt, then president of UT, were recognizing the need for a state income tax. I know that, at that time, mention of such was waving a red flag. Even Andy Holt couldn't convince the public that Tennessee would be in trouble without a state income tax. After 47 more years of the regressive sales tax, our infrastructure, health care and education have suffered and we rank low among the states in all of those areas and more. I'm happy that a state income tax is being discussed.
responding to Gilbert Martin...
Who are the users of the National Guard? Where would you send that bill? Do you bill the victims for police services?
What about the schools? Are the users the students? Where do 6-year olds get the money to pay for education? Are they the only beneficiaries? What about their parents, or future descendants. Let's tax the unborn descendants, they'll benefit the most from their parents' education. Have you paid for YOUR parents' education? What about the rest of us who benefit from a more vibrant economy because the TN workforce is more skilled, earns and spends more and makes other businesses profitable?
Your argument is absurd.
I have been for a State Income Tax since 1984 when congress disallowed sales tax deductions. They have since let us itemize sales taxes; that's good, but sales taxes are regressive. You cannot run a state government on sales taxes. We need Tax Reform! r_butler@comcast.net
"Who are the users of the National Guard? Where would you send that bill? Do you bill the victims for police services?"
Everbody is a user of National Guard protection services. Send everyone an exactly equal bill for .
Ditto for the police expense.
"What about the schools? Are the users the students?"
Yes they are. And their parents should be responsible for paying for the service just like any other private sector service that's provided to the kiddies.
"Are they the only beneficiaries?"
Don't give me any of that "collective" benefit stuff.
My neighbors lawn service company may make his yard look better and have an effect on keeping up property values but that doesn't obligate anyone else living in the vicinity to chip in to pay for it.
"What about the rest of us who benefit from a more vibrant economy because the TN workforce is more skilled, earns and spends more and makes other businesses profitable?"
Mere speculation on your part as to the cause of ANY economic outcome occuring at any place at any time.
You are completely incapable of ever proving that the value of any secondary "benefit" accruing to any subsidizer of services to anyone else has ever exceeded the cost incurred by the subsidizer to provide it.
It is obvious we need tax reform. In Tennessee the richest 20% pay 3.3% of their income in taxes and the rest pay more and more until you get to the 20% with the lowest income, who pay 11.7% of their income in taxes. It is time to stop the wealthy from running the show and telling us "income tax" is a dirty word. It is obvious why they do so--to keep Tennessee regressive--regressive in the tax system, which benefits them and regressive in our underfunded health care, education and a host of other much needed services to bring Tennessee up to par finally with a progressive income tax.
Reply to G. Martin...
Oh I've proven the collective benefit idea to everyone else here. You're the only one saying, "Don't confuse me with the facts. My mind is made up."
You must be one of those rugged individualists who pulled himself up by his bootstraps. Try it sometime. Stand up, grab your bootstraps and see if you can lift yourself off the floor.
"Oh I've proven the collective benefit idea to everyone else here. You're the only one saying, "Don't confuse me with the facts. My mind is made up."
You haven't "proven" anything and you don't have any facts. All you have are claims you are incapable of backing up with any facts.
