by Jon Styf
Tennessee ranked fourth in the country in the CATO Institute’s recent 2021 Freedom in the States rankings.
The rankings use 230 policy variables to rank states on how their policies promote freedom in fiscal, regulatory and personal realms. The CATO Institute is a public policy think tank based on libertarian ideals to promote limited government, free markets and peace.
Tennessee ranked second in the nation in fiscal policy freedom and also was second in economic freedom. Florida was No. 1 in fiscal policy freedom, while Nevada was first in economic freedom.
“Tennessee has long been one of the economically freest states, largely because of its outstanding fiscal policies, but it also used to be one of the personally freest states in the South,” the report said. “That edge disappeared as it became a more stereotypical red state. As a result, Tennessee fell from third in overall freedom in 2001 to seventh in 2012.”
Tennessee does not have a state income tax. Both its state and local taxes are below the national average. Overall state-level taxes fell from 5.1% of adjusted personal income in Financial Year 2007 to 4.1% in FY 2020. The national average is 5.7%.
Local taxes average 2.5% in Tennessee, below the national average.
CATO suggests that states “separate spending and tax committees in the legislature, a reform shown to correspond to lower spending over time. Sales taxes are high and could be cut.”
Tennessee ranked much lower, 39th, in personal freedoms that include victimless crimes, guns, tobacco, and education.
You can read Tennessee’s specific rankings here.
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Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Styf is a reporter at The Center Square.
Both comments are misinformed. Tennessee has only 2 cities in the top 125 cities in the US for sales tax, 7th Memphis at 9.75 and 15th Nashville with 9.25. Chicago as an example is 10.25%
Tennessee ranks 38th in terms of property tax and has no income tax.
Total tax burden onTennessee residents (income, property and sales/excise) ranks 49th out of 50 states.
State and county budgets are balanced and State has $1.5B in its rainy day fund.
My property taxes have increased over 50% in the last 6 years. Tell me again how great Tennessee is managing its money.
Freedom for who in Tennessee? Only rich, white (and mostly male) people? The state’s regressive SALES tax is the HIGHEST in the U.S. You call that free? It means that the non-rich, especially poor, people, have to pay MORE for their food and essentials than the wealthy Tennesseans like Lee and his plutocratic I’m surprised that Tennessee has not yet had bread riots like it did during the Civil War against high Confederate taxes!
Brag while you can. The recent increases in many counties’ property taxes and Lee’s tyrannical handling of the virus mess shows the direction the state is headed.