Posted on 06/26/2002 8:19:24 PM PDT by GailA
Modified Income Tax Plan Emerges Another tax plan has emerged on Capitol Hill.
Senator Jim Kyle has proposed a plan that would create a six percent flat income tax while eliminating Tennessee's six percent sales tax on nearly everything.
But the plan would place a seven percent sales tax on amusement, recreational and tourist purchases, including restaurants, motels, alcohol and tobacco.
The plan would raise about one-point-two (b) billion dollars next year and nearly one-point-seven (b) billion dollars in the first full year it's implemented.
The plan sparked much interest among key members of the Senate Finance Committee, including Senate Republican leader Ben Atchley. He has long opposed an income tax.
Atchley says the plan has "a lot of promise." That's in part because it would call for a constitutional convention on taxes to be held in 2004. House Speaker Jimmy Naifeh says if the Senate passes the plan, he would try to get the House to approve it.
Kyle says he hopes to have a bill drafted by tomorrow for committee action.
What are we supposed to call this new income tax plan The BROKEN PROMISE PLAN?
What's next 10% or 20% where's the absolute ceiling?
YOUR BROKEN PROMISES ARE AS WORTHLESS AS WARM SPIT.
I'll be back with my protest sign tomorrow, Friday, Saturday or Sunday. Just like I was there today.
NO DOGS, NO CATS, NO INCOME TAX, NO BROKEN PROMISES TAX HIKES.
CUT YOUR GROSSLY BLOATED BUDGET AND GO HOME!
ANGRY TAX PAYER AND VOTER!
LOOKS LIKE ATCHLEY NEEDS LEANED ON. Rep Curtis is NOW a NO vote...thank him. RINO chris newton is now a YES vote.
House Finance Committee OKs CATS II plan
by Tom Sharp Associated Press
NASHVILLE -- A patchwork tax plan designed to get the state through another year and then dissolve, putting the financial troubles into the lap of the next governor and Legislature, was approved Tuesday by the House Finance Committee.
The so-called CATS II plan by Rep. Frank Buck, D-Dowelltown, would raise several taxes, including the sales tax in most places in the state and on all alcohol and tobacco products.
It would raise an estimated $766 million and provide enough money to cover the deficit built up over the past few years and pay for spending increases mandated by law or court order.
Buck said he "assumes" the plan will be on the House floor either today or Thursday.
"We've been trying to reach a consensus on something for God's sake to get us out of this crisis," Buck said. "The only motivation I have is to try to keep the state from going to hell in a handbasket."
The state's fiscal year begins Monday, July 1. The state needs about $800 million in new tax revenue to fund the same budget next year it has this year.
Buck pitches the CATS plan as an alternative to a no-new-taxes budget that would cut $750 million from the current level of state spending.
The CATS II plan would rely on the sales tax and so-called sin taxes for most of its revenue. It would also change business tax law in several regards.
The biggest portion of the tax would come from a statewide, uniform 8.75 percent sales tax. The state tax is now 6 percent. Local governments can add up to 2.75 percent.
In areas where the local option is less than the maximum, the tax would go up by the difference and the state would capture the extra money. The statewide average is 8.4 percent, so on average an increase of just over a third of a cent.
The CATS II plan also would raise the single article cap from $1,600 to $5,000. That is the amount of money to which the local option tax applies. Again, the state would capture the extra income.
It would increase the tax on a pack of cigarettes from 13 cents to 43 cents, and raise the taxes on beer, liquor and wine by 80 percent.
It would raise the excise tax on business profits from 6 percent to 6.25 percent, and raise the registration fee for commercial trucks from $50 to $100, and make the new fee retroactive.
It would extend the sales tax at 8.75 percent to the exempt portion of cable television bills (the first $16), to newspaper sales and subscriptions, and to coin-operated amusement devices.
It also would apply the tax to vending machine sales -- soda machines and the like.
"I agree we've gotten ourselves into an awful mess and need to do something about it," Rep. Craig Fitzhugh, D-Ripley, told Buck. "But I can't see how this does anything more than put it off for a few more months. We've got 12 tax increases in here, and there is no measure of reform."
Fitzhugh said the CATS II plan would cause Tennessee taxpayers to pay more money than the income tax plan of House Speaker Jimmy Naifeh, even though the income tax would raise more money for the state. That is because of the income tax's deductibility from federal taxes, and because it can be exported to people who live outside the state but work here.
The uniform sales tax of 8.75 percent would go out of existence next June 30, Buck said.
"These gubernatorial candidates say they can manage their way out of this, and that's part of our problem," Buck said. "There's something therapeutic about letting them have at it."
Rep. Larry Miller, D-Memphis, said the talk of tossing the state's financial problems to the next governor should stop.
"This is our responsibility, not theirs," Miller said. "What we're doing here is a patchwork again, for a fifth straight year. I think it's a shame we're even talking about doing that again. We're just making the problem worse."
Several members of the committee said they would vote to send Buck's bill to the floor so the entire House membership could debate it, but would not support it there.
"Our obligations on this committee are different than they are on then floor," said Rep. Kim McMillan, D-Clarksville. "I won't stand in the way of this bill here. But I do not want that vote seen as support for this bill."
The bill passed out of committee on an unrecorded voice vote.
Later in the day the committee passed another bill that converts the $200 professional privilege tax into an income tax of 1 percent on income of up to $30,000, meaning the top payment would be $300 a year.
Buck also sponsored that bill. He did not say so publicly, but the bill is widely known to be an effort to get a test case on a state income tax before the Tennessee Supreme Court.
The ironic thing was that the 12-11 vote broke down almost exactly opposite of the way the Naifeh income tax vote broke. Nine of the 12 'yes' votes on the professional privilege income tax voted against the Naifeh bill on the floor on May 22. All 11 of the 'no' votes in committee voted for the Naifeh bill.
Many members of the General Assembly believe an income tax is unconstitutional. The Supreme Court declared one to be so in 1932. The last four attorneys general have said they believe an income tax could be written so as to be constitutional. Some members of the Legislature would like the courts to decide that question on a tax around which the state's entire budget was not built.
In other tax action Tuesday, the Senate Finance Committee killed a combination tax plan by Sen. David Fowler, R-Signal Mountain, that would raise nearly $940 million -- about the same as Naifeh's income tax bill. "The battle is over but not the war," said Fowler, who said he would try to attach the plan to any revenue bill that makes it to the Senate floor. "This is the best alternative to an income tax. It spreads the tax burden between businesses and individuals."
The CATSII bill is HB2569/SB2829.
THE OAK RIDGER 6/25/02
Atchley and other senators met privately Tuesday with House Speaker Jimmy Naifeh, who is trying to cobble together a 50-vote majority in the House for a 4.5 percent flat-rate income tax.
"If he's got the votes the rest is academic," Atchley said. "I think the Senate is in the mode of supporting whatever gets 50 votes
"Need to do something about it"
What this sickening, big-government pig means is, "Confiscate more money from Tennessee's producers."
"Cut spending" is not even in the vocabulary of these scumbags.
Is it time for an armed tax revolt yet?
Wonder what will happen first: This post gets deleted or I get a 'friendly' LEO visit?
I lived in Germany for 2 years. Moved there from VA. Had no property, driver's license (my dumbass got it revoked for a while so while I lived overseas I had none), vehicles registered, etc. Didn't drive on VA roads, didn't go to VA schools, basically abandonded the place.
Paid fed taxes, but no state taxes.
Well my employment contract ended and now I'm back.
I've been getting letters about my '99 return not being filed, etc.
Sent them documentation that I was OVERSEAS.
Think that I'm going to have a legal battle on my hands. Don't know yet.
Any advice from those more educated than me? FReepmail me and I'll give more detail.
Once again, I apologize for being off-topic.
They haven't even passed the 4.5% IT, and they are already trying to raise it. To anyone who thinks that the sales tax would go away under this proposal, I am Santa Claus. You will end up with both taxes (and more in the future).
Keep up the fight. It is going to be a hot summer in Tennessee.
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