Income tax reform still on legislative table

When it gets around to proposing changes in the state's revenue structure, the new Tennessee Tax Study Commission just might diverge a bit from the predictable path followed by its predecessors.

It's probable, of course, that the new panel will have the same objective as prior panels, which date to the 1970s. That objective is a state revenue system that incorporates an income tax.

The new commission will have 15 members. Gov. Don Sundquist and House Speaker Jimmy Naifeh, both open income tax advocates, and Lt. Gov. John Wilder, who has wandered all over the tax map, each appoint five.

For the most part, the members represent various special interests that are at least comfortable with the concept of tax reform, including an income tax.

Thus, the deck is arguably stacked. The appointees so far include more folks with a history of supporting an income tax than opponents.

The previous study commissions and committees found that Tennessee was too reliant on the sales tax, had too many sales tax exemptions and too many loopholes in other taxes, especially those on businesses.

The state revenue system is now even more reliant on the sales tax, which was raised to the highest level in the nation by the same bill that created the commission, while even more exemptions and loopholes have been piled onto the tangled mess of a tax structure.

So the study would likely reach a conclusion similar to that of its predecessors, even without the predisposition of appointing authorities and most members.

The trick would be to take a different path toward reaching a tax reform objective. And there's an obvious alternative trail.

That is simply to draft a tax reform package and then let people vote on it as an amendment to the state Constitution.

In the past, such notions have been attacked by both sides of the overall income tax issue.

Cumbersome it is. But income tax advocates have failed so miserably in their efforts to enact reform by legislation that a statutory income tax is already dead - if not forever, at least for the foreseeable future.

Thus, an astute income tax advocate should recognize that putting the issue to a vote is the only real choice nowadays.

On the flip side, the anti-tax zealots should see a statewide vote as the means for finally driving a stake through the heart of the evil, blood-sucking IT, once and for all.

So here's what the commission could do: Crunch the numbers and figure what a balanced tax system would entail, then recommend to the Legislature that it go to the people for a yes or no vote as soon as possible.

That would be in 2006, the year Gov.-elect Phil Bredesen would be up for re-election. Remember, he wouldn't rule out an income tax in his second term back during the campaign. So maybe he would go along with a referendum. Sundquist would not.

The commission plan should be as specific as possible, perhaps along the lines of the Copeland plan back in the early 1980s. Basically, he proposed that the Constitution be revised to permit a flat-rate income tax and a flat-rate sales tax for funding state government with virtually all other taxes repealed.

Local governments would keep the property tax, which like the income and sales taxes, would have a constitutional cap and could never be raised, except perhaps in emergencies and then only with a two-thirds majority vote of the Legislature.

The 103rd General Assembly, which will cease to exist after the 2004 session, would have to approve the plan.

That would be a difficult hurdle to clear. But, hey, legislators finally let folks vote on a lottery last year. Maybe a legislative majority would let them vote on a tax system.

Then we could all vote in 2006 and decide collectively whether to follow the recommended path.

Tom Humphrey, chief of the News-Sentinel's Nashville bureau, may be reached at 615-242-7782 or humphrey@edge.net

The tax commission panel is STACKED WITH ALL PRO-INCOME TAX GOOD OLD BUDDY WHITE MEN..no women or minorities allowed.

Get your anti tax signs out and get ready girl, I have bed space at my house...we'll march by day and sleep well at night!

This pretty much backs up what Humphrey said on Teddy Bart's show this week. He thinks that a Constitutional Convention will be called and the people will vote for or against an income tax in 2006. Given the way Bredesen's gang manipulated the Nashville "NFL Yes" vote, I am sad to say that I think he probably would be successful in pushing an income tax.

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