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May 21, 2002

TN Abandoning Sales Tax?

Over in Freeperland (freerepublic.com), there is much agitation over the Tenneessee legislature's movement to replace much of the state sales tax with an income tax for the first time in the state history. See TN TAX BATTLE: SALES TAX EXPANSION LEGISLATION STALLS IN TENNESSEE HOUSE. Facing massive budget shortfalls, the turn to the income tax will not only raise more money, it will actually not raise taxes on 80% of state residents, since it will help shift the tax burden from the poor to richer Tennesseeans. Sales taxes are under threat generally due to untaxed out-of-state Internet sales, a point I wrote about in Prop 13 Meets the Internet. So moving from regressive sales taxes is not only fairer, it makes more sense in the digital age.

Posted by Nathan at May 21, 2002 08:44 PM


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