Nashville, TN (April 15, 2012) — Today, Arthur Laffer appeared before the Tennessee General Assembly Joint Fiscal Review Committee to testify about the “Economic Consequences of Tennessee’s Estate Tax.”
Tennesseans for Fair Taxation and Tennessee Citizen Action urge the state legislature to refuse to be bogged down by arguments for or against the estate tax (which affects less than 1000 Tennesseans) and instead consider revising the entire tax structure of the state, including corporate tax law and corporate tax loopholes, luxury tax rates, out-of-state sales tax collection, state incentives to corporations, the lack of claw back provisions in corporate incentive contracts, etc..
“Tomorrow is tax day for millions of Tennesseans and as our state legislators continue to weigh in on the repeal of the estate tax, we urge them to consider the entire tax structure of the state,” said Bill Howell, executive director of Tennesseans for Fair Taxation, “What would benefit the hardworking people of the state would be a fair tax structure that creates a fair economy that equally benefits all Tennesseans. A successful economy is a an economy where every Tennessean has a good job, can afford to send their kids to college, support their family and retire with security.”
Despite Mr. Laffer’s assertions to the contrary, the estate tax (9.25% on amounts over $440,000 after an exemption of $1 million) is not the reason why we have high unemployment and low growth. In fact, Tennessee already has the low overall tax burden which he and state legislators say is the perfect corporation-friendly climate needed for job and state growth: no income tax, a very low corporate tax rate, low property tax rates, the ability for employers to fire workers without cause, a lax regulatory system, the lowest minimum wage allowed by law, and low workers’ compensation costs. And yet, compared to an average of 58.5 percent among all states without income taxes, Tennessee’s gross state product has grown by just 38.6 percent in the last decade. In addition, we are consistently ranked lowest among the states in measurements of health, well-being, and quality of life.
“What’s clear is that after all these years of passing tax policy that caters to corporate interests we still have many problems. How can anyone think that repealing the estate tax – Mr. Laffer said himself that the estate tax affects a “narrow sliver” of people – will change things?” said Mary Mancini, executive director of Tennessee Citizen Action, “We’ve tried crafting tax policy that prioritizes large corporations over middle-class and working families and local businesses and it’s clearly not working. We need a high quality revenue system that treats Tennesseans equitably.”
The last time the Tennessee had a comprehensive study of the state and local tax structure that the General Assembly accepted was in 1985 when a Special Joint Legislative Task Force on State and Local Tax Structure issued their final report.