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STATE TAX REFORM:
As a member of the statewide coalition Tennesseans
for Fair Taxation (TFT) since 1991, SOCM has been actively involved in the fight
for fair taxes. Tennessee’s current tax structure relies heavily on a state
sales tax. Tennessee now taxes food, clothing and other basic necessities at 7%
with local governments often adding up to another 2.75%. This places an unfair
burden on low-income families who spend a higher proportion of their income on
food and basic needs.
As a coalition member of
Tennesseans for Fair Taxation, in 2006 SOCM worked for a bill that would reduce
Tennessee’s food tax and replace the revenue with an increase in the cigarette
tax. Tennessee has the nation’s highest food tax at 8.4 % (8.75% in some
counties) and one of the lowest cigarette taxes (ranking 47 out of 50 for lowest
cigarette tax). The “Tax Swap Bill” was set to cut the state component of food
tax in half, from 6 to 3%, and replace the lost revenue with an increase in the
cigarette tax.
The Tax Swap Bill fell one
vote short in the Senate Finance Committee, despite overwhelming public support
and strong support in the Legislature. The five senators that voted for the
bill included Sen. Doug Jackson (D-Dickson), Sen. Tim Burchett (R-Knoxville),
Sen. Ward Crutchfield (D-Chattanooga), Sen. Rosalind Kurita (D-Clarksville), and
Sen. Jim Kyle (D-Memphis). We appreciate their foresight for Tennessee.
Those who voted against the
bill were Sen. Ron Ramsey (R-Blountville), Sen. Randy McNally (R-Oak Ridge), and
Sen. Doug Henry (D-Nashville). Senator Ramsey’s election campaign was the
single largest recipient of tobacco industry money on the committee, according
to a recent investigative report by the Chattanooga Times Free Press. The
tobacco lobby was clearly one of the fiercest opponents of the Tax Swap and
included lobbyists from R.J. Reynolds and Phillip Morris.
While the tobacco lobbyists
were fighting the cigarette tax increase, the Governor’s Office was opposing any
reduction in the food tax even if the revenue were replaced. Previous
statements from the Administration made it clear that Governor Bredesen is
considering raising the cigarette tax in his second term for other purposes,
purposes which do not include a food tax cut, giving Tennesseans yet another
regressive consumption tax.
Two legislators abstained or
“passed”, Sen. Mike Williams (R-Maynardville) and Sen. Joe Haynes
(D-Nashville). Sen. Jeff Miller (R-Cleveland) was not present for the vote. If
any of these three legislators had voted for the Tax Swap Bill, then it would
have had the six votes needed for passage.
Individual SOCM members
continue to work putting together trainings for key constituencies to help build
the base for tax reform at the local level. In addition,
TFT will reintroduce the Tax Swap Bill in 2007. Watch for future updates. |
