Weekly Obsession: A very flat tax

Tuesday, January 17, 2012 at 10:05pm

On the first day of 2012 session of the 
Tennessee General Assembly, Gov. Bill Haslam rolled out his legislative package.

Despite his insistence in the run-up to the gavel that tax cuts were not in the offing, the governor indeed proposed cutting the estate tax and the sales tax on food.

Haslam said he’d like to cut the food tax from 5.5 percent to 5.3 percent this year with an ultimate goal of a flat 5 percent rate.

Yes, 0.2 percent. Two-tenths of one cent.

On a $100 grocery bill, that’s a 20 cent savings.

The governor’s office estimated the state will lose $18 million in revenue in the first year of the cut. Divide that number by the 6 million or so Tennesseans and each and every one of us will see an extra $3 per year thanks to this bold plan.

And that 20 cents on the $100 grocery store trip? It doesn’t go as far as it once did.

At a typical grocery store, 20 cents will get you one envelope of cherry Kool-Aid, two slices of deli cheese or a lonely peel-and-eat shrimp.

That would make an interesting — if tiny — casserole.

If, as Haslam promises, he can roll the food tax back to 5 percent in the next three years, that’s a 50-cent savings per trip. That’s a whole extra can of black-eyed peas (Fergie not included).

Times are tough, of course, and every little bit helps. Tennessee’s in a unique geographical position as few Tennesseans live more than an hour’s drive from another state. Kentucky, North Carolina and Georgia have no sales tax on food.

Arkansas, Missouri and Virginia have a lower food tax than Tennessee. 

Maybe Haslam thinks cutting the rate will keep more grocery dollars at home, just as he said his reduction of the estate tax will keep folks from going to Florida to die.

Or maybe he wants to encourage creative casserole making.

4 Comments on this post:

By: pswindle on 1/18/12 at 10:30

He will surely take us down the road of no return. The GOP just doesn't get it, because it takes money to run the state. Just look at our roads and other needed repairs. I do not understand this governor of ours.

By: 1kenthomas on 1/18/12 at 1:09

And how much is it going to cost the state to implement each of these changes? How much is it going to cost businesses to implement?

Speaking of big government off it's leash! (These anti-big-government guys are a cure that's worse than the disease.)

I also bet Has-been-lam really thinks he's doing something to help people here. Reminds me of a story of a gy paying just over minimum wage to his office, who sent out an email offerring his Titans tickets for $800. Vandy MBAs with golden spoons in their mouth, who think handing 20 cents to the slaves is an act of generousity.

By: govskeptic on 1/19/12 at 8:58

Ruse on extremely small sales tax just to eliminate or change law
on larger drop of inheritance and Hall Income tax revenue .
Donors mean a great deal more than voters!

By: spooky24 on 1/20/12 at 5:23

Well, if he is trying to win back conservatives, those that think he is a wimp and a media slave this is not the way to do it. Just like the White House he considers all Tennesseans chumps who can't do arithmetic or see through political spin. I would challenge the notion that donors are more important that voters-he has done nothing to appease his donors because he spends so much time bent over for the media.

sp