Election rewards those who love the sales tax
by Bill Carey
The Legislature just spent six months arguing, grandstanding, hanging out with lobbyists and running up a huge per-diem bill before raising taxes to the tune of almost a billion dollars on the backs of people who can least afford it. Last week's election proved that Tennessee residents apparently don't want it any other way.
Although there are still several close races yet to be played out in November's general election, the general trend that appears to have come out of last week's primaries is that most incumbent legislators are about to be reelected. The only exceptions to that rule are the people who chose a state income tax and the elimination of sales taxes on food and non-prescription drugs over a sales tax increase. In many of last week's primaries, tax reform advocates barely survived challenges or even lost. Meanwhile, incumbents and candidates who signed income tax pledges and encouraged radio talk show hosts to get citizens to honk their horns and march on the state Capitol to protest the very notion of a state income tax are being rewarded.
Among the more significant examples of this trend:
 With the emergence of Republican Van Hilleary and Democrat Phil Bredesen in the gubernatorial race, Tennessee voters have a choice between a person who pledged not to support an income tax and a person who pledged louder not to support an income tax. Interestingly, various polls have shown that between 35 and 50 percent of Tennessee residents support an income tax if it is accompanied by a removal of sales tax from groceries (a higher base of support, by the way, than the number of residents who favored higher sales taxes). This means a large percentage of voters will have to hold their noses when they go to the polls in November.
In the state House, just about every incumbent running appears to be in good shape except for three people who supported an income tax and lost: Ralph Cole of Elizabethtown, Zane Whitson of Unicoi and John White of Lawrenceburg. In each case, the incumbents were attacked for other things in addition to their support of an income tax. (White, for example, was criticized for his ownership of a bar in Florida.) But it is not a coincidence that the only three defeated incumbents all supported an income tax. And no one in the House has (so far at least) been thrown out of office for voting for a $933 million sales tax increase—the largest tax increase in the history of the Volunteer State. Sales-tax-increase supporter Jamie Hagood, for example, easily won her primary against challenger Craig Kisabeth.
In the state Senate, every incumbent appears to be in good shape except for Tommy Haun of Greeneville, who lost to mortgage lender Steve Southerland. Haun, who was strongly suspected of leaning toward an income tax, was the powerful chairman of the Senate Transportation Committee. Haun also had bipartisan support and close alliances with the Tennessee Farm Bureau and the Tennessee State Employees Association. Meanwhile, state Sen. Douglas Henry of Nashville actually had a credible challenge from a tax reform advocate named Jeff Wilson. However, Henry won 61 to 39 percent, largely because the chairman of the Senate's Finance, Ways and Means Committee outspent his younger challenger 10 to one. In 2004, when the other half of the state Senate faces reelection, its members will remember the fates of Sen. Haun and challenger Wilson.
Marsha Blackburn, the state senator from the Nashville suburbs, easily won the Republican primary for the seventh Congressional district and is a shoo-in to be elected in November. Just a year ago, Blackburn was accused of helping to incite a near-riot at the end of the legislative session (a few hours before things got out of hand at the Capitol, she sent an email to Nashville area right-wing talk show host Steve Gill asking him to "send in the troops" in order to squelch last-minute talk of a constitutional convention on an income tax). Blackburn's probable election to Congress sends a signal to her colleagues that people who use all means within their power to intimidate tax reform supporters will be rewarded.
The primary, combined with the resignations of income tax advocates such as Sens. Bob Rochelle of Lebanon and Gene Elsea of Spring City, raises the obvious question of how long it will be before a state income tax is seriously reconsidered in Tennessee. Probably 2007 at the earliest. That year, the person we are about to elect will be in the first year of his second term (curiously, each of Tennessee's last three governors warmed to the idea of an income tax during his second term). By that time, sales tax border leakage and Internet leakage will have grown to the point where the next governor will actually begin to acknowledge their existence. (In their attempt to undermine the income tax, both Bredesen and Hilleary have downplayed tax leakage—a bizarre tactic, since a recent UT study predicted that by 2006 Internet sales would cost Tennessee $664 million in sales tax revenue.)
By 2007, Tennessee residents might see the flaw in Hilleary's current argument that the sales tax isn't really all that regressive, an assertion that contradicts concepts that are taught in every basic economics class in high school and college. And by 2007, even radio talk show hosts might have begun to notice that people who live in other states have better government services and get a huge tax break because they get to deduct their state income tax on their federal income tax return.
For the time being, however, income tax opponents rule the day. About all the rest of us can do is complain and look for every legal way to increase sales tax leakage in an attempt to show our disgust.
Anyone up for a grocery run to Kentucky?
August 8, 2002 Vol. 12, No. 32
© 2002 Metro Pulse
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