Tennessee Governor Bill Haslam has told the Associated Press that "now is not the time" to eliminate Tennessee's estate tax (i.e. "death tax) or Tennessee's Hall Income Tax-the tax on stock and bond dividends. The Hall Income Tax is seen by some as a loophole around Tennessee's prohibition of a regular income tax. The Governor admits that these taxes are "bad"-his words, not ours-and that they "chase capital away from the state." Some of that capital is going to Florida, where some Tennessee business owners are moving since Florida not only lacks an income tax, they don't have anything like the Hall Tax and they have no estate tax. People would generally like to pass on the fruits of their labor to their families without being robbed by the State or federal governments.
Despite Haslam's admission that these taxes do not represent long-term good or a pro-growth economic policy for Tennessee, the Governor claims that we can't afford to cut or eliminate them, or for that matter to abolish Tennessee's tax on groceries, which hurts the poorest citizens of our State. Haslam says we are still in an economic pinch and need to conserve every penny, and if these taxes were reduced or eliminated, that neither he nor the General Assembly has a strategy to replace the lost revenue that would result. Perhaps the Governor and the General Assembly need to come up with such a strategy so that these taxes can be cut for the benefit of all Tennesseans. Governments always come up with some excuse why they can't really cut taxes or reduce their size, and at some point when economic times are a bit better, it still isn't likely that either Haslam or a future Governor of either party will be beating the doors to the House and Senate Chambers down to demand passage of a major tax reduction. As is currently the case, a group of legislators will have to take the initiative, and we will again hear excuses from all quarters about why it can't be done or shouldn't be done now.
If taxes cannot be cut now, when our State's economy can really use the boost, they certainly won't be cut when the State's coffers are bursting with tax revenue from good economic times.
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