Lt. Gov. Ron Ramsey is slamming the door on the possibility of cutting the grocery tax, saying most people wouldn’t notice if it was lower, anyway.
“I’ll bet you that if you poll the citizenry, there isn’t 5 percent that can tell you that when you walk into a grocery store and you buy some pork and beans, your tax is 5.5 percent from the state, and if you reach right beside it and get a box of toilet paper, it’s 7 percent,” Ramsey told reporters Thursday.
“I think it’s more psychological than it is anything else,” he said.
Sales taxes, including on the purchase of food, are the bread and butter that fuels state and local government spending, Ramsey said. Combined with local sales taxes, food is taxed as much as 8.25 percent while other goods are taxed at a rate up to 9.75 percent.
Lowering the food tax might end up starving government of necessary revenue nourishment, Ramsey said.
“We’re never going to do away with (the food tax) completely. So I don’t think that lowering it really does help that much, and I think we can concentrate more on the tax that we can actually eliminate,” he continued.
Asked by a reporter if he used to be a supporter of cutting the sales tax on food, Ramsey said, “Actually, I wasn’t a big proponent, to be perfectly honest.” However, as recently as July, Ramsey said, “I’d love to eliminate the food tax and I hope and pray that Tennessee will soon be in a position to do just that.”
At present, Ramsey is setting his sights on cutting the 6 percent Hall tax on income from interest and dividends while House Speaker Beth Harwell is looking to cut the inheritance tax, which kicks in on estates worth more than $1 million.
House Democratic Caucus Leader Mike Turner announced Friday he wants to repeal the Hall tax altogether.
“The Republican majority has said they want to cut taxes and I think they should support this legislation and also produce a balanced budget,” said Turner. “I am calling upon all my colleagues in the House Republican Caucus to sign on to this bill.”
Gov. Bill Haslam has said he’d like to lower all three of those taxes, but says next year is probably not the time.
Democrats are pushing for a reduction in the food tax, but Republicans have pushed back, calling the proposal irresponsible political posturing.