NASHVILLE, Tennessee: Tennessee's Republican leaders in the General Assembly plan to move forward with their efforts to reduce the Hall income taxes and the inheritance tax. Governor Bill Haslam has expressed concern that the state's increased revenues may not be enough to make up for the losses that this would cause.
Senate Speaker Ron Ramsey has stated a desire to implement an incremental approach toward doing away with the Hall tax on income from dividends and interest. He said, "I think it is doable. Obviously I think we should wait a little longer before we say ‘no’ to something like this."
Speaker of the House Beth Harwell stated that she wanted to concentrate on reducing the current inheritance tax. She has said, "I respect that the governor has concerns about filling potential budget gaps, but House Republicans have wanted to address this issue for a long time." She also said, "The fact that we don’t have an income tax has done wonders for the state. "The Republican caucus just wants to move that ball down a little bit further and work on specifically the death tax."
The state's inheritance tax only applies to estates worth over $1 million, and it earned the state roughly $107 million in revenue last year. Tennessee collected around $189 million in revenue from the Hall taxes. This totaled about 2.8% of the state's revenue in the 2010-2011 budget year.
Harwell states that the reason for these tax cuts is the following: "There’s no doubt that these taxes chase away retirees, and break up family farms and family businesses."
Democrats have criticized Republicans for focusing on these specific taxes instead of the state's 5.5% tax on groceries. "Democrats are proposing a tax cut on groceries that helps working and middle class families, while Republicans are cooking up tax giveaways for Tennessee’s millionaires," Democratic Party Chairman Chip Forrester said.