Posts Tagged ‘taxes’
NASHVILLE – The Beacon Center of Tennessee today released “Our State, Our Future,” a publication in the Faces of Freedom series that focuses on the harmful impact Tennessee’s investment income tax has on the lives of Tennesseans. The Hall Income Tax empowers the Tennessee General Assembly to “levy a tax on incomes derived from stocks and bonds.” For Tennessee residents, this is a punitive tax that penalizes sound financial planning, subjects individuals to double taxation, hamstrings retirees, and is a blight upon a state that’s built a reputation as an income tax-free haven.
“We made sure to save throughout our careers…we were never so ‘well-to-do’ that we didn’t have to be concerned about our future, or our children’s futures,” explains Jon and Linda Freeman—a retiree couple from Coldwater featured in “Our State, Our Future.” Jon and Linda made responsible choices with their finances in the hopes of securing a sustainable retirement, but were unaware of the Hall Income Tax when they made the decision to relocate to Tennessee from Alabama. Now, the couple struggles with the six percent tax on their total fixed yearly income since the Hall Income Tax is not marginal—meaning that earning just one dollar above the $59,000 exemption level means their entire income is subjected to the hefty tax.
Nicholas Holland, also featured in “Our State, Our Future,” is a young entrepreneur from Nashville who also faces the harsh reality of Tennessee’s income tax secret. Nicholas is now reluctant to draw income from his investments that would allow him to grow and expand his business. “The Hall Income Tax is…an income tax of the worst kind: it punitively punishes a segment of our population, namely the elderly, who have taken risks…and hope to see their risks pay off,” Holland asserts.
The Beacon Center believes that the time has come to end this antiquated tax law and invite more people like Nicholas and the Freemans to make Tennessee their home. “Eliminating the Hall Income Tax would mean a sacrifice of less than two percent of Tennessee’s total annual revenue, but would have a significant impact on the lives of Tennesseans who depend upon their frugal investments to sustain them in the years ahead,” suggests Lindsay Boyd, Policy Director at the Beacon Center and author of the new report. “By taking this simple step, our legislators can encourage entrepreneurial and economic growth by attracting more small businessmen and families to the state, effectively cementing Tennessee’s claim as one of the tax-friendliest states in the nation.”
See the full Faces of Freedom publication, “Our State, Our Future” here.
The Beacon Center of Tennessee’s mission is to change lives through public policy by advancing the principles of free markets, individual liberty, and limited government. The Center is an independent, nonprofit, and nonpartisan research and public policy organization dedicated to providing timely solutions to public policy issues in Tennessee.
Faces of Freedom is a Beacon Center series to educate Tennesseans about the barriers to prosperity brought about by poor public policy. By providing real-life stories of real-life citizens, Tennesseans can better understand the impact public policy has on their lives.
###February 4th, 2014 | Feature, Policy
Beacon proposes new calculations for the state spending limit
NASHVILLE – The Beacon Center of Tennessee today released a proposal to the Tennessee General Assembly on recalculating the Copeland Cap, a state spending limit devised by former Rep. David Copeland and approved by voters to the state constitution in 1978. Currently, spending may increase at the same rate as the rise in the personal income, effectively meaning that Tennesseans must hand over more to the government as their personal financial circumstances improve. The Beacon Center’s more fiscally responsible approach calls on state lawmakers to instead base the calculation upon population growth plus the rate of inflation.
“Thanks to the leadership of Rep. Copeland, Tennessee’s spending cap has ensured limited growth in Tennessee’s budget, but in hindsight, it could be an even more effective tool to curb state spending—allowing hard-working Tennesseans to keep more of their own money,” explains Justin Owen, CEO of the Beacon Center and author of the brief. Since adopted in 1978, the Copeland Cap has been exceeded with regularity—only 18 times in 35 years has the legislature failed to exceed the cap.
Beacon’s proposed change to the calculation of the Copeland Cap spending limit is based on the assertion that as prosperity rises, Tennesseans will have less need for government services. Demand for government services decreases as citizens become increasingly able to provide for their own welfare. The Beacon Center maintains that lawmakers should not take advantage of increased taxpayer capacity to fund layers of unnecessary bureaucracy. A more appropriate and reasonable calculation would be to use population growth plus inflation, which more directly impact the state budget.
Amending the spending formula would also mean a savings to Tennessee taxpayers. Population plus inflation rates have jointly risen by approximately five percent per year since the enactment of the Copeland Cap, while personal income growth has risen by over six percent on average per year.
“This difference sounds modest, but in practice, it is significant,” Owen asserts. “Had the Copeland Cap been calculated using population plus inflation since its enactment in 1978, taxpayers would have saved more than $38 billion in the ensuing three-and-a-half decades. That amounts to more than $6,300 for every man, woman, and child in Tennessee. Not every taxpayer…every single person.”
The full brief, entitled Securing a Fiscally Sound Future for Tennessee, can be found here.
The Beacon Center of Tennessee is an independent, nonprofit, and nonpartisan organization dedicated to providing concerned citizens and public leaders with expert empirical research and timely free market solutions to public policy issues in Tennessee. The Center’s mission is to change lives through public policy by advancing the principles of free markets, individual liberty, and limited government.
###January 21st, 2014 | Feature, Policy
NASHVILLE, TN — The Beacon Center of Tennessee, the state’s free market think tank, today announced the results of its eighth annual ranking of the state’s Most Business-Friendly Cities, a measurement of the 50 most populous cities in Tennessee based on their business climates. The ranking is the result of data collected across ten factors considered to fundamentally affect local economies and determine the future growth of communities.
This year’s Most Business-Friendly City is Brentwood, becoming the first city to take the top spot in two consecutive years. This Middle Tennessee town is often considered an outpost for Nashville commuters, but is quickly carving its own identity as an alluring, tax-light city to raise a family and start a business. The Beacon Center will present Brentwood city officials with a plaque commemorating its achievement for the second year in a row in early December.
The study, titled How Business-Friendly are Tennessee’s Cities?, ranks each city with a score in three primary categories: Economic Vitality, Business Tax Burden, and Community Allure. These main categories consist of subcategories that measure the cities’ changing population, unemployment, sales and property taxes, high school graduation rates, and other indicators that encourage or discourage business development and economic growth.
Brentwood has consistently ranked in the top tier of Tennessee’s friendliest business communities, and after second place finishes in 2010 and 2011, finally captured and successfully defended the top spot for 2012 and 2013. Building upon its trends over the past two years, Brentwood continued to outpace other cities in a range of categories, including low taxes, a high quality education system, strong population growth, highest median income, low crime, and second lowest unemployment rate.
“Brentwood’s achievement as Tennessee’s top business-friendly city for two years running proves the city is serious about providing an economic environment ripe for entrepreneurial activity and stability,” said the Beacon Center’s Director of Policy Lindsay Boyd, co-author of the report. “Families, small business leaders, and college graduates can all find opportunities in Brentwood’s thriving community.”
“Each year, the Beacon Center conducts this intensive survey of Tennessee’s top 50 cities with the hope that we see improvements made across the board from one year to the next,” Boyd said. “Brentwood continuously demonstrates excellence in performance, making the city a powerful example for those communities looking to implement positive changes that improve the lives of their residents and attract businesses.”
The full report, along with the ranking of each of Tennessee’s 50 most populous cities, can be found at http://www.beacontn.org/wp-content/uploads/2013-Business-Friendly-Cities-Report.pdf. For a simple list of the rankings without the full report, click here.
The Beacon Center of Tennessee is an independent, nonprofit, and nonpartisan research organization committed to achieving a freer, more prosperous Tennessee. The Beacon Center’s mission is to change lives through public policy by advancing the principles of free markets, individual liberty, and limited government.
###November 18th, 2013 | Feature, Policy