Posts Tagged ‘Justin Owen’

Repeal Hall Tax, make Tennessee truly income tax-free

Repeal Hall Tax, make Tennessee truly income tax-free

The original piece ran in the Tennessean.

Tennessee Gov. Bill Haslam, the new chairman of the Republican Governors Association, has expressed support in the past for repealing his state’s tax on stocks and bonds, referred to as the Hall Income Tax.

Yet, legislation to phase out the tax failed to pass last year, in large part due to concerns among the governor’s administration about lost revenue. Anticipating these apprehensions, legislative leaders are moving forward with a new bill in 2015 to repeal the tax on investment income in a responsible manner that addresses revenue concerns.

As a result, Gov. Haslam now has a chance to become the chief proponent of the repeal effort that would make Tennessee a true no-income-tax state.

Tennessee may claim to be income tax-free, but the fact is, anyone who has a retirement account made up of stocks and bonds would beg to differ. The Hall Income Tax imposes a significant 6 percent tax on the dividend income earned by these Tennesseans, with minor exemptions.

This predominantly harms middle-class senior citizens, proven by the fact that more than 40 percent of those who pay the tax make less than $75,000 a year. The tax brings in around $260 million a year, which amounts to less than 1 percent of state and local revenue.

The tax also deters business owners and retirees from moving into Tennessee. Migration trends show that Americans are fleeing income-tax states in droves. While Tennessee would otherwise be a magnet for these hardworking, job-creating, taxpaying citizens, many shun the Volunteer State for greener pastures because of the Hall Tax.

Repealing the tax would encourage individuals, families, retirees and entrepreneurs alike to relocate here, bringing their tax revenue with them.

In this sense, the money brought in by those moving into our state and buying houses, cars and other items — and paying property, sales and similar taxes as a result — would help offset the lost revenue on the front end.

The rest of the gap could easily be filled by corresponding cuts in spending, which would not be hard to find. From failed programs, multimillion-dollar handouts to politically connected corporations and downright waste, fraud and abuse, there is plenty of fat to trim from the state budget. That’s the easy part.

Sen. Mark Green and Rep. Charles Sargent have proposed a common-sense, fiscally responsible solution that adequately addresses Gov. Haslam’s concerns. Their proposal, supported by the Beacon Center and Americans for Tax Reform, would phase the tax out over a period of no fewer than six years. During that time, the state could responsibly put spending in line with revenue, and local governments could plan for the future.

Only when state revenues increased by 3 percent per year would the next step of the phase-out occur, one percentage point at a time until the tax is gone. If government’s coffers grow by 3 percent in one year, it’s taxing too much. It needs to return that money to taxpayers rather than squander it away on unnecessary political pet projects.

Gov. Haslam has proven to be a fiscally responsible tax-cutter during his first term in office. Now in his second term, Gov. Haslam has the opportunity to become an example for other governors to follow.

He can lead the charge to repeal the Hall Tax, returning Tennesseans’ hard-earned money to their pockets, making the Volunteer State attractive to relocating investors and retirees, and he can do so in a way that is financially sound.

With his leadership, Tennessee can become income tax-free once and for all, and the envy of every other state as it becomes the most free and prosperous state in the nation.

Justin Owen is president and CEO of the Beacon Center of Tennessee, the state’s premier free market think tank. Patrick Gleason is state director of Americans for Tax Reform and a senior fellow with the Beacon Center.

March 27th, 2015 | Commentary

FCC Tramples on State Sovereignty

FCC Tramples on State Sovereignty

Yesterday, the Federal Communications Commission (FCC) took one of the most egregious, unconstitutional steps in its 80-year existence. And I’m not talking about its endorsement of net neutrality. Rather, the FCC squeezed itself into the middle of a longstanding relationship between cities and their states.

Currently, various electric utilities are dabbling in the Internet business. Among them is Chattanooga’s Electric Power Board, an agency of the city that has spent half a billion dollars in taxpayer and ratepayer money to expand its Internet services. The Electric Power Board petitioned the FCC to expand its footprint so that it could provide Internet in neighboring counties.

That expansion is currently prohibited by state law, and for good reason. Government-owned Internet has cost taxpayers billions of dollars and raises serious privacy and censorship concerns. In addition, it destroys the neutral and level playing field that exists in the market. When government both umpires the game and takes a turn at bat, it’s hard to argue the game is not rigged.

After failing to change state law despite numerous attempts, the Chattanooga utility took its case to Washington, asking the FCC to arbitrarily override the state. In response, the governor, attorney general, lieutenant governor, and speaker of the House all pleaded with the FCC to respect state sovereignty. The attorney general sent a letter noting that the FCC lacked the legal authority to approve the Electric Power Board’s expansion, because Chattanooga is a “political subdivision of the state,” and thus must get the state’s permission—not Washington’s—to expand its footprint.

The Electric Power Board and FCC’s actions are akin to a spoiled child throwing a temper tantrum, and then running to the neighbor for permission to do something his parents wouldn’t allow.

Of course, just like the parents could still punish the spoiled child for his actions, so too can the state of Tennessee make the Electric Power Board put its nose in the corner. The state has the express and constitutional authority over the Electric Power Board and any other public utility, and the FCC needs to mind its own business. As Lt. Gov. Ramsey and Rep. Glen Casada warned to the FCC, “Tennessee state legislators are accountable to the voters who elect us, and the FCC would be well advised to respect state sovereignty.”

Kudos to our state leaders for pushing back against a wanton FCC and a bratty utility. From the looks of it, they won’t be getting away with this one.

-Justin Owen

February 27th, 2015 | Beacon Blog, Recent News

My Insure Tennessee Thoughts

My Insure Tennessee Thoughts

After watching many of the legislative proceedings and managing the Beacon media outreach, here are a couple of my observations and takeaways from last week’s Medicaid expansion debate from the perspective of a Communications Director.

Respect Across the Board

For the most part, the discussions around Medicaid expansion were polite and respectful in the legislature and across social media. Since Medicaid expansion is such an explosive issue, I expected more fireworks and personal attacks. However, during the proceedings I was pleasantly surprised by the respect shown both by legislators and interested parties on both sides of the issue. Ultimately, I think it shows that everyone involved in this issue was well intentioned and this will hopefully serve as an example we follow in future debates.

What is the Beacon Center?

The Beacon Center is a free market nonprofit, but our description seemed to be changing with each news article written. Politico referred to us as conservative, Tennessean writer Dave Boucher called us a “tea-party aligned think tank” and a “conservative think tank” in different articles, and numerous outlets routinely refer to us as a libertarian think tank. Surprisingly, the most apt description of the Beacon Center came from none other than the New York Times, who called us “a Nashville nonprofit that advocates smaller government.”

Anti-Medicaid Expansion Arguments Based More in Reality Than Speculation

After watching most of the testimony, including fantastic testimony from our very own Justin Owen and Lindsay Boyd, it seemed to me that the main reason Medicaid expansion was killed was based on the persuasiveness of the arguments. The anti-expansion argument was based on the results from other states and the fact that we are giving the federal government too much power over healthcare in Tennessee. The biggest problem with the argument in favor Medicaid expansion was the fact that there was no written legislation to vote on, it was all speculation, a point Justin Owen really hammered home. None of the legislators knew exactly what they were voting on, and I think that speculation is what ultimately killed the proposal so quickly.

-Mark Cunningham

February 11th, 2015 | Beacon Blog, Feature, Recent News