Senator Brian Kelsey points out this article, “How Tennessee Voters Could Achieve A Multi-Generational Economic Boom,” posted at Forbes.
While much of the media bandwidth is focusing on the more controversial Tennessee ballot measures, Amendment 3 is equally important, as it allows the state to permanently stake its claim as income-tax-free. The amendment, which will appear on the November 4 ballot, would prohibit the Tennessee legislature from ever authorizing or allowing any state or local tax on earned personal income.
A “yes” vote on Amendment 3 is absolutely critical for the continued economic growth of the Volunteer State. To quote Senator Brian Kelsey: “This is going to help us bring in jobs to Tennessee. We can say not only do we not have an income tax, but we’ll never have an income tax.” By prohibiting the future implementation of an income tax, Tennessee is lighting a bright neon “Open” sign that will attract families and businesses alike.
Tennessee has much on which to pride itself. Since the implementation of the “use” tax in 1947, the Volunteer State has been protecting workers and the businesses that they create. Tennessee taxes items purchased from out-of-state vendors that do not collect the state’s sales tax. This protects local Tennessee businesses, which must collect sales tax, from unfair competition from merchants outside of the state. Pair this pragmatic and pro-Tennessee-business strategy with the state’s lack of an income tax, and you have the foundation for a very appealing economic climate.
Proponents of Amendment 3 understand their recent history and know why it is so important to permanently prohibit a state income tax. The state Supreme Court says that an income tax is unconstitutional, but if the language is carefully worded, the legislature could impose such a tax. This end-run around the state constitution was attempted in 2002, when special interest groups seeking a direct pipeline to more taxpayer money advocated for a state income tax. Fortunately, cooler heads in the legislature prevailed, but not without and ugly and expensive fight. (And, as recently as 2010, eight Tennessee legislators proposed an income tax.) The passage of Amendment 3 would prevent such a sideshow from ever occurring again, and ensure that Tennessee workers can continue to keep more of what they earn.
State Seal of Tennessee.
Anyone with an interest in data should quickly see why Tennessee must set its no-income-tax status in stone. As my Wealth of States coauthor, the esteemed economist Dr. Art Laffer, often says, “Taxation doesn’t generate revenue, it moves people.” Between 1992 and 2011, the state gained $10.55 billion in net adjusted gross income, with the lion’s share coming in from such high-tax states as California, Michigan, and Illinois. The nonpartisan Tax Foundation ranks Tennessee as 15th-best in the nation on its 2014 State Business Tax Climate Index. And it’s not just small to mid-sized businesses that are taking note of Tennessee’s sunny tax climate; global players like Amazon have opened giant warehouses in the state.
Tennessee is a significant player in the Heartland tax revolution, creating real opportunities for working families while Washington, D.C., sputters and stagnates on tax reform. Heartland states understand the need to compete, both on a national and international stage. A yes vote on Amendment 3 sends the clearest of messages: In order to stay competitive, Tennessee must eliminate the possibility of an income tax, today and tomorrow.
If not Tennessee, then where? If not Tennessee taxpayers, then who?
Author Travis Brown has put the case succinctly to readers. He gives proponents excellent facts to argue with those so backward as to want more taxes.