Tennessee’s Hall Tax, as of this coming Friday, will cease to exist.
Experts say that will bring new opportunities to Tennessee and make the state’s economy more competitive.
The Hall Tax, instituted in 1929, applies a 6 percent tax to Tennesseans’ interest and dividend income. In 2016 members of the Tennessee General Assembly phased out the Hall Income Tax over years of scheduled reductions.
On Monday, members of the Nashville-based Beacon Center of Tennessee said that “the Hall Tax had long existed as an ‘asterisk’ to Tennessee’s proud claim to be income tax-free.”
“The repeal of this tax was due in large part to the aggressive campaign by the Beacon Center,” Beacon staff said in an emailed press release.
Beacon is a right-of-center think tank.
“On January 1st, Tennessee will finally become truly income tax-free,” Beacon Center CEO Justin Owen said in the press release.
“This has been a long time coming and thanks to the work of both Beacon and the legislature, it has finally come to fruition. Tennessee is now an even more attractive place for retirees and businesses alike to put down roots.”
Members of the Arlington, Virginia-based American Legislative Exchange Council, in their 2017 edition of Rich States, Poor States said that “Americans in states with poor economic policies increasingly vote with their feet and move to states with better opportunities and brighter horizons.”
And Tennessee benefits, said report authors Art Laffer, Stephen Moore, and Jonathan Williams, in 2017. Laffer was on President Ronald Reagan’s Economic Advisory Board and is credited as “the father of supply side economics.” Moore wrote for The Wall Street Journal. Williams is ALEC’s chief economist.
Their report examined state migration trends and how tax policies affect those trends.
“Taxes on investment income are often assumed to apply mostly to the rich, but not so with the Hall Tax, where more than half of those paying it earn less than $75,000 per year,” the report said.
“Most of those paying the 6 percent tax are hopeful entrepreneurs, working-class families, retirees and soon-to-be retirees who especially depend on their savings and investments for retirement.”
The authors said the tax forces fewer individuals to partake in those activities. Revenue from that tax comprised less than 1 percent of Tennessee’s budget, making it “unlikely to harm the state’s ability to fund its budget,” they added.
Repealing that tax and the state’s death tax make Tennessee more competitive, the report said.
“By repealing the death tax, lawmakers helped more small businesses and farms remain family-owned and put Tennessee on even footing with the majority of states in terms of attractiveness for retirement and estate planning,” the authors wrote.
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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
The Hall Tax affected the few! The Combined Sales Tax of State, county and city, in some places over 10% total affect everyone in a big big way!
i remember the first 1% sales tax. IT WAS TEMPORARY THEY SAID. I remember Lamar Alexander raised the sales tax three times, i believe along with the fuel tax three times too!
Then Counties and cities were allowed to pile on the Citizens back their tax burdens too!
The Citizens/Tax Payers are the piggy bank of Developers turned /Government/Legislators.
A hundred dollars in groceries, nay, ninety dollars. the State of Tennessee and counties and Cities get about ten dollars or in some cases over ten dollars.Major League Billionaire wants a stadium let the Taxpayer pay for it. Float bonds that Taxpayers pay for it and the interest too. Democrats want to import more Illegals for cheap labor fro Billionaire Corporations, Golf Courses and the like let Tennessee Tax Payers pay for their health care and so on. Ten percent of what’s left after Federal Income Taxes and State and Federal fuel taxes for Developers and Road Builders inc and destruction by Semis means we exist on half of our incomes! No more Democrat welfare for Illegals or Corporate Welfare by Everyone in the Legislature, no more Welfare for Developers!! Let them pay for their own access ramps and so on! About time our Temporary Sales Tax expired don’t you think, or at least 75% of it!
Casca – I could not have said it any better. The only thing that I would add is the ungodly property taxes that are being raised at a backbreaking rate. I thought we were guaranteed the right to own property in the USA but the truth is that we only rent it. Don’t believe me? Try not paying your property taxes and see who really owns it when the government takes it.