tell the whole truth

A lot of Tennessee “progressives” periodically like to make a lot of noise about how Tennessee’s sales tax (5.5% on food, 7% on almost everything else, plus whatever cities and counties decide to add to it) unfairly discriminates against those of modest to low means, and how we, as a state, should instead move to an income tax in order to make things more equitable and fair. Of course, a lot of states charge both income and sales taxes, and one small detail often escapes these “progressives” in the course of their bleeding-heart rants: Tennessee already has an income tax… just not a widely-known one:

Yahoo news does a story on states without income taxes and how they are fairing. Oddly (or not) Tennessee is not mentioned as a state that has no income tax. I guess Yahoo can see what the AG can not, that the Hall income tax is an income tax.

So what is this Hall Tax? Oh, just your standard success-punishing income tax:

Enacted in 1929, this tax was originally called the Hall income tax for the senator who sponsored the legislation. The law can be found in Tennessee Code Annotated in Title 67, Chapter 2.

The individual income tax is imposed on individuals, partnerships, LLCs, Estates, and trusts and other entities receiving interest and dividends. Some types of interest and dividends which may be taxable on your federal return will be exempt from Tennessee taxation.

Standard Exemptions:
The first $1,250 in taxable income received by a single filer is exempt. The first $2,500 in taxable income received by a joint filer is exempt.

Persons over 65 with total income less than $16,200 (single filer)
or $27,000 (married filing jointly) are exempt.

DUE DATE
Annual – April 15

TAX RATE
6% of taxable income

In short, if you are successfully enough, smart enough, savvy enough, saving enough, or simply old enough to make at least $1,250 a year if you are single, or $2,500 a year if you are married, from your investments and bank accounts (no mean feat, especially these days), the state of Tennessee would very much appreciate it if you were to send 6% of those dividends or interest incomes to the states’s Department of Revenue, thanks.

Remind me again how punishing people for success is a good idea? Or helps the economy? Or is somehow “fair”.

Oh well – as a state goes, Tennessee really is not all that bad… but it does have some quirks.