Posted on 05/21/2002 4:24:58 PM PDT by GailA
Flawed Study Misleads Tennessee Taxpayers
A study released last Friday in support of a proposal to institute a broad-based state income tax overlooks a great deal of existing research pointing to the dangers of such a plan. "Supporters of Speaker Naifeh's income tax plan would rather mislead Tennesseans with flawed statistics than confront the real source of Tennessee's budget problem: their own bloated spending habits," said NTU President John Berthoud. "In fact, a mountain of evidence shows that a state income tax would fuel government, stall the economy, and leave all Tennesseans with a bigger tax bill." Read more by CLICK HERE.
NTU is working with concerned taxpayers in Tennessee to defeat the income and "sin" tax plans. We need everyone in Tennessee to contact their elected officials and tell them to oppose these tax hikes. If you haven't participated, you can by clicking here.
Tennessee--NTU members have generated hundreds of faxes and emails in opposition to Speaker Naifeh's income tax plan. If you have not already contacted your Legislators, please do so. You can express your opposition to the tax plans by clicking here.
http://ntu.org/news_room/press_releases/P0205TNTaxStudy.php3
For Immediate Release Tuesday, May 21, 2002 For Further Information, Contact: Jerry W. Terry or Pete Sepp, (703) 683-5700
Nation’s Largest Taxpayer Group Slams Study’s Flawed Findings on Naifeh’s State Income Tax Plan (Alexandria, VA) – A study released last Friday in support of a proposal to institute a broad-based state income tax overlooks a great deal of existing research pointing to the dangers of such a plan, according to findings reported today by the 335,000-member National Taxpayers Union (NTU). The group has nearly 5,500 members in the state of Tennessee.
“Supporters of Speaker Naifeh’s income tax plan would rather mislead Tennesseans with flawed statistics than confront the real source of Tennessee’s budget problem: their own bloated spending habits,” said NTU President John Berthoud. “In fact, a mountain of evidence shows that a state income tax would fuel government, stall the economy, and leave all Tennesseans with a bigger tax bill.”
According to Berthoud, who holds a Ph.D. in Political Economy from Yale University, last week’s report, conducted by the public employee union-backed Institute on Taxation and Economic Policy (ITEP), contains a number of flaws and omissions:
“Sin” Tax Hikes Soak the Poor. In touting the savings that would supposedly result for lower-income households from the Naifeh plan’s sales tax provisions, ITEP fails to account for the proposed increases in alcohol and tobacco taxes. A study by Congress’s Joint Committee on Taxation found that 2/3 of federal tobacco taxes already come from those earning less than $40,000. A Tax Foundation analysis determined that all told, federal excise taxes (similar to those in the Naifeh plan) hit households with less than $10,000 of income five times harder than households making $500,000 or more. Thus, the proposed “savings” to many working-class and poor families would be much less than advertised. Furthermore, despite ITEP’s assertion, loading a $1.1 billion tax hike on the backs of Tennesseans with incomes of $38,000 or more would hardly seem “fair” to many taxpayers.
Worse Economic Performance. Income taxes penalize productivity and job creation more severely than most other taxes. A study prepared for NTU’s research affiliate used econometric modeling to analyze the effects of income taxes in the nine states that have most recently adopted them, and applied the results to Tennessee. According to this research, had Tennessee adopted an income tax in the year 2000, citizens would lose a total of $305.1 billion in personal income (in constant dollars) over the 20 years that would follow. The per-capita income loss between 2000 and 2020 would add up to $46,737.
The Problem Is Spending. Lawmakers who hope to use the ITEP study as political cover for a tax hike can’t hide from chronically-bloated budgets. Tennessee spending is $3.87 billion higher in 2001 (after inflation) than in 1995, the year Gov. Sundquist tookoffice.
Ironically, an income tax would make this spending problem even more difficult to manage. In seven of the nine income-taxing states mentioned above, state government spending grew significantly faster after adoption of an income tax than in the 2-4 decades before adoption – again, adjusting for inflation. “There’s nothing ‘fair’ at all about burdening hard-working Tennesseans with a $1.1 billion tax hike,” Berthoud concluded. “If lawmakers truly want to be fair to Tennessee taxpayers, they must stand up to special interests and curb their big-spending budget plans instead.”
NTU is a non-profit, non-partisan organization working for lower taxes, less wasteful spending, and taxpayer rights at all levels. Note: The Tennessee income tax study prepared for NTU’s research affiliate is available upon request. More information on state fiscal policy is available online at www.ntu.org
You were warned. Good luck.
Tennessee: make it clear to these self-serving pukes that if they pass an income tax in YOUR state, you will refuse to pay it, and you will hunt down every last one of them and find them a new line of work. Remember: THEY WORK FOR YOU! Not vice versa!
Is this a switch or a decision from an undeclared?
Is Bowers a scumbag Democrat? Do you think somebody got some dirt on her?
Keep in mind that the tax calculator does not include the 1% "temporary" sales tax increase or the new capital gains tax (and the likely economic results of that new tax in terms of job loss and capital flight), nor does it factor in the sin taxes on alcohol and cigarettes, nor does it factor in the new $75 million in business taxes that will be passed along to consumers, nor does it factor in the certainty that the rate will increase in a couple of years (since they are already saying the money raised will still not be enough for Tennessee).
Finally, it does not factor in the economic disaster that looms when a state in the midst of a recession passes a (before it is all said and done) $1.5+ billion tax increase. Other than that, I guess it COULD be accurate.
Steve Gill
Your continuing efforts to keep freepers informed about the shenanigans going on in Tennessee are greatly appreciated. The income tax battle there most definitely has national repercussions. The income tax scumbags MUST be defeated, and Scumquist MUST be outlasted.
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