Tennessee Works to Dump Last Income Tax
Other states should take note.
In an effort to boost business and reduce the burden on senior citizens, the Tennessee legislature voted to repeal the state’s tax on income earned off bonds, notes and stock dividends. For years, the Volunteer State has largely been income-tax free because it collected revenue through a robust sales tax. The Hall Income Tax was the lone exception, and if the bill is signed into law by Republican Gov. Bill Haslam, it will be phased out until it’s gone by 2022.
Free market think tank Beacon Center of Tennessee applauded the lawmakers’ move. Beacon CEO Justin Owen said in a statement, “[Legislators] realized that this tax unfairly hurts senior citizens and job creators and did the right thing to repeal it. … More than half of the people who paid the Hall Tax make less than $75,000 per year and that just isn’t fair. We are proud that Tennessee has finally lived up to its reputation as a truly income tax-free state.”
Not everyone is pleased with the tax reduction, though. Tennessee’s large cities and counties complained their income from the state would drop by a couple million dollars. Haslam said the cuts were a bit more than he expected, but he didn’t say whether he’d veto the cut. Already Tennessee is an attractive state in which to do business and retire. This bill would encourage the practices further. Other states should take note and consider trimming some of the tax burden for their residents.
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