Cracking Tennessee’s Nest Egg Tax
BY JUSTIN OWEN
When I meet fellow policy wonks from across the country, I often hear a comment about how it must be nice to live in a state with no income tax. “It must be nice,” I always respond, “but I wouldn’t know.”
To the chagrin of many Americans who have moved to Tennessee seeking refuge from other high-tax states, they too bought the income tax-free mantra. Yet, come tax time, many of these new Tennesseans were shocked to discover our dirty little secret—the Hall Income Tax.
The Hall Tax imposes a 6% tax on income from stocks and bonds. This amounts to a hefty penalty for seniors and drives job-creating investors to states like Florida and Texas. Imagine saving your entire life, preparing to provide for yourself and your family in retirement, only to be hit by this tax. In Tennessee, we reward hard work and responsibility, yet the Hall Tax punishes these good deeds. This tax on seniors’ nest eggs and job creators is not the Tennessee Way.
In the coming weeks, the state legislature will debate whether to phase out the Hall Tax, a plan similar to the one a few years ago that eliminated our death tax. There will be tremendous pressure by local governments—who get a cut of the tax revenue—and spendthrift politicians to keep the tax in place. That’s why it is imperative that Tennesseans who know that the Hall Tax is bad for our state must make their voices heard, just like many Tennesseans have already done. Below are some comments we’ve received about the ruinous tax.
“It’s a penalty for working hard, saving, investing, and planning for retirement.” – Harold C.
“The Hall Tax really hurts retired people living off of their invested saves that was earned through many years of labor!” – Mary Ellen R.
“If you’re retired, saved all your life, and now have no income (remember these funds have already been taxed) and this is what you are living on for the rest of your life, it’s a BIG deal.” – Karen C.
When lawmakers take up the Hall Tax repeal starting next week, will they side with big government or with these Tennesseans who know that the Hall Tax has got to go? We’ll be watching, and you can too. To receive updates about the progress of the Hall Tax repeal efforts, visit www.EndtheHallTax.com and sign up.