Time to cut the sales tax

Frank CagleFeature, Politics

Republican Gov. Bill Haslam and his legislative super majority have been very, very good to business and upper income earners. How about if the next governor does something for the rest of us?


The Republicans have eliminated the gift tax, phased out the Hall Income Tax on dividends, killed the inheritance tax and cut the excise tax on businesses. Along the way they have cut the sales tax on groceries by a tiny amount, but also levied a gas tax on all of us.

I like tax cuts and am OK with most of these cuts. And not everyone who benefited from them is rich. But the cuts tended toward relief in the upper tax bracket. Now there is a chunk of revenue coming along and the next governor will decide where to fit it into the budget. It’s time for a substantial cut in the sales tax, which is regressive in that poor people pay a larger percentage of their income in taxes.

The U.S. Supreme Court has ruled the state can collect sales tax from any internet company selling in the state, not just from companies that have a physical presence. That likely means a $450 million annual boost to state revenues. (Everybody was supposed to be paying sales tax already, but without a brick and mortar location in the state there was no way to collect it. This levels the playing field for large and small businesses who have a building and pay taxes versus companies with internet sales.)

At a Chattanooga debate after the recent court decision the Democratic candidates talked about how to spend the additional revenue. (I’m shocked.)

Republican business guys Bill Lee and Randy Boyd talked about how business taxes are too high, which sounded like another round of tax cuts for business. (I’m shocked.)

House Speaker Beth Harwell was the only candidate to suggest that additional revenue be used to cut the sales tax. Tax cuts instead of spending is her go-to position in that as House leader she was instrumental in passing all the tax cuts enumerated above.

We don’t know about Diane Black, because she ducked another debate. My guess is that she would use the $450 million to build internment camps for illegal aliens.

If you run into any of the gubernatorial candidates you might ask them if they would lead an effort to reduce the sales tax before any other taxes are cut or additional spending is considered.

Short Takes

  • Have you seen the commercial where a teenager is riding around on a motorcycle, wearing a weird shirt and a military helmet? If you turn the volume up it turns out to be a grown man who wants to represent you in Washington.
  • In all fairness, this time of year it is too hot for Knox County Mayor Tim Burchett to wear his usual Carhartt jacket. But I don’t understand what message riding a motorcycle in slouchy clothes is supposed to send about your qualifications to serve in the U.S. House of Representatives.
  • It was a little puzzling for some people when arch conservative Mike Huckabee endorsed and did a series of ads for businessman Randy Boyd’s bid for governor. Well, the political consultant running Boyd’s campaign is Chip Saltsman. Saltsman ran Huckabee’s campaigns for president and remains a close friend of the family.
  • Things are looking up for Randy Boyd. In 2010, all three Republican candidates were from East Tennessee: Bill Haslam from Knoxville, Zach Wamp from Chattanooga and Ron Ramsey from the Tri-Cities. Heavily populated Middle Tennessee didn’t have a candidate. This time around Middle Tennessee has three Republican candidates. Bill Lee is surging in the polls, apparently pulling votes away from Congresswoman Diane Black. Lee, Black and House Speaker Beth Harwell are a Middle Tennessee triumvirate. If the three carve up Middle Tennessee and split the vote and Boyd runs strong in his home area of East Tennessee, Boyd could win with a plurality. Boyd’s margin in the East may be the deciding factor in the election. (Memphis has a Democratic majority and rural west is the least populated area of the state. It also gets much less attention from Republican candidates.)
  • Knoxville is often a stop for many television personalities on their way to a bigger market. We are glad that WVLT’s Ted Hall and WBIR’s Abby Ham came back and grateful that CNN’s Jim Acosta didn’t. When reporters (like Acosta) have stories written about them being obnoxious it’s not a good thing.

Reach Frank Cagle at efrankcagle@yahoo.com

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