Posted on 10/25/2009 3:58:21 PM PDT by The Magical Mischief Tour
CHATTANOOGA, Tenn. -- A study shows Tennessee's average 9.4 cent tax on every $1 spent is the highest sales tax rate in America. Opponents of the sales tax say it's most unfair to those least able to pay but others favor the sales tax over a state income tax.
The author of the tax comparison study, Tax Foundation staff economist Kail Padgitt, said an increasing number of states are raising so-called "millionaire taxes" on income of the wealthiest taxpayers and so-called "sin taxes" on cigarettes or beer. Padgitt told the Chattanooga Times Free Press the foundation is "definitely seeing more movement upward than downward in taxes on the state level, and the most popular seem to be to target particular types of tax groups."
The nonpartisan study group said the average 9.4 cents combined state and local sales taxes for every $1 spent by consumers in Tennessee is nearly 38 percent more than the median sales tax nationwide. By comparison, the combined state and local sales tax rate averages just over 7 percent in neighboring Georgia and 6.15 percent in Alabama. Although some localities in central Alabama have higher combined rates of up to 11 percent, Tennessee averaged the highest rate among all 50 states. The Tax Foundation said Tennessee derives nearly 57 percent of its tax revenue from sales taxes, third highest among the 50 states.
Critics of Tennessee's reliance upon consumer taxes say it is unfair to the poor and sends consumers to border states to shop. "Tennessee's sales tax is regressive tax so those that can least afford it have to pay the most," said Samantha Maples, a community organizer for Tennesseans for Fair Taxation, a pro-income tax group. "In addition to being unfair, the sales tax also hurts businesses along our borders and it is simply inadequate to fund our government." But Drew Johnson, president of the Tennessee Center for Policy Research, said relying on sales taxes is better than using income taxes to fund government.
Tennessee is one of nine states that does not impose a tax on earned income, although the state does have a Hall income tax on dividend income. "Our sales tax in Tennessee doesn't need to be as high as it is and the government should look for ways to cut spending and waste," Johnson said. "But the sales tax is still the fairest and most responsible way to tax residents of the state. Tennessee is a haven for entrepreneurs because we don't have an income tax."
I actually believe in sales tax.
So,to all you folks from the Volunteer State...it could be a *lot* worse.
Not state property taxes.
No it’s not. Chicago has a 10.25% rate.
Tennessee does not have a state property tax. All property taxes are county or city imposed. Nor do we have taxes on wages but there is a tax on interest income and we have the highest estate taxes in the country. Both of which should be eliminated.
I lived all but the last five years in Tennessee, (60 years)
Greatest state in the nation.
I prefer sales tax to any other.
Same thing here. I much prefer the high sales tax than an income tax. I have 44 beautiful acres of land, an older four bedroom frame house and a 30X20 garage and my property tax is only $680 a year.
Yeah but what’s the car insurance like?
In Houston, Texas the property you describe would be taxed around 20K per year. Around 3% of value.
We have county and city property taxes.
And there is no doubt that this increase to 10.75 will spread thought California. And the poor will feel the sting. Just goes to show you we got what the nitwits for King Obama voted for. He has destroyed the economy and it will go further down the tubes. Watch what the health bill and the cap and trade will do.
Sure seems like a much fairer system to have sales over property taxes.
On the other hand, a local tax on property could be justified by the services that are received by that property... access by maintained county roads, police, fire, schools servicing the area... I'm not pro-tax or pro-property tax, but it seems at least as reasonable as a tax on income. I'll grant you the issue with the taxes increasing over time.
And I can honestly say that I am more tolerant of taxes at the local level than at a greater distance (federal, for example), since county taxes get spent in the county (or city).
Here in South Carolina (and I visit my mom in Tennessee every few months) our sales tax on food is ONE percent.
In Tennessee (a lovely state I enjoy visiting) the food tax is eight percent.
There are other states which don’t tax food or medicines at all.
Just sayin’.
Note, that tax is charged on GASOLINE too, on top of the excise taxes. When gasoline goes up, the state gets a windfall.
Who was the previous contender?
So you Knoxvillians can forget about coming to Waynesville and Asheville to shop in order to pay lower sales taxes.
Tennessee has the highest statewide average rate.
Limit the sales tax to first 1000 dollars of a purchase,watch Tn. BOOM.
In New Jersey, you will get hit with an income tax, a sales tax, and a 10-15K property tax.
People there think that's normal.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.