The Hall Tax is a 6% tax on investment income, dividends, and the like over $1,250 for individuals and $2,500 for couples. It’s the state income tax no one ever mentions when they brag about how Tennessee doesn’t have an income tax, because of course not everyone gets income from these sources. Mostly it's a tax on rich people and senior citizens and, well, rich senior citizens.
What I love about this story is how the legislature plans to pay for the projected $186 million loss of income:
Ramsey said he plans to pay for his proposal by eliminating the legislature's joint House and Senate oversight committees — which deal with TennCare, education, corrections and long-term care — and shifting their function to committees that have overlapping jurisdiction within each chamber.
Oh! Well that ought to cover $186 million dollars! Riiight.
Er, maybe not. But then there’s this:
Eliminating the tax would cost far more. But supporters argue that phasing out the tax would encourage retirees to move to the state, stimulating the economy and offsetting the cost with higher sales tax revenues.
Sure, because we all know folks on a fixed income are just cash cows waiting to be milked. You know, as I push my cart around the Kroger on Senior Discount Tuesdays the one thing that’s always occurred to me is that this state needs more old people.
Okay, that’s just me being snarky.
Seriously, this is a terrific idea, if for no other reason than the entertainment value. Let’s watch wealthy cities without a significant commercial base try to fund their operations without the Hall Tax. I’m thinking of places like Belle Meade, whose residents have come to expect a rather high level of service -- 16 police officers for what is basically three square miles, for example. How y’all gonna pay for that without the Hall Tax? Or what about Forest Hills, which near as I can tell is 100 percent residential. Good luck providing trash service to your 4,500 or so residents, building code and zoning enforcement and the like. I’m sure that influx of seniors with their Medicaid-funded Hoverounds will fill that budget hole nicely. If not, I'm sure the wealthy denizens of Forest Hills -- TNGOP moneybags Lee Beaman, for instance -- won't mind a teensy hike in their property taxes.
This is gonna be fun, folks!