From apparel to zip-up kitchen bags, merchandise sold in Nashville would bear some of the highest sales tax in the nation if the backers of the city’s proposed light rail system have their way, a PAC says.
NoTax4Tracks is the PAC opposing the May 1 referendum in Nashville/Davidson County on a proposed increase in sales and hotel taxes. The organization issued a press release over the weekend criticizing Mayor Megan Barry’s plan to raise the state-city sales tax to 10.25 percent to help finance the transit plan.
The PAC says 10.25 percent would give Nashville the highest sales tax in the nation. According to the Tax Foundation, two cities currently are tied for the dubious honor of highest sales tax, and both have rates of 10.25 percent: Long Beach, California, and Chicago. Nashville would tie for the top spot in the nation’s most expensive cities in which to shop. Nashville is currently tied in ninth place on the Tax Foundation’s sales tax list.
The city’s sales tax would increase by 0.5 percent from 9.25 percent to 9.75 percent, NoTax4Tracks says on its website. By 2023 the tax will have increased to 10.25 percent.
“Whether it’s a senior living off of social security and/or pensions, or someone who’s livelihood depends on disability payments, the transit plan, if passed, would be devastating,” the NoTax4Tracks press release says.
David Fox recently told The Tennessee Star, “I think that’s a very punitive approach for the middle class and lower-income.”
The Tax Foundation said, “Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs,” citing a research paper published in 2005 by West Virginia University’s Regional Research Institute. “For example, strong evidence exists that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago’s high sales tax rates.”
NoTax4Tracks adds, “And that’s just the starting cost. Not a single project of its type has come in at or under budget in any other major metropolitan area. The worst part: It won’t even solve our traffic issues… and for years, perhaps as much as a decade or more, it will make them worse.”