Tennessee’s senate speaker says he’ll focus on cutting a tax on investments, not one on food, in the coming legislative session. Republican Ron Ramsey says it’s to reward those who save their money.
Earlier this year lawmakers cut the state’s inheritance tax and its gift tax. They also trimmed the food tax just slightly, by one-fourth of a percent. Governor Bill Haslam wants to bring it down to an even five percent next year. Past that, Senate Speaker Ron Ramsey doesn’t see dropping it much further.
Instead, Ramsey’s targeting the Hall Income Tax, which dings retirees pulling money out of investments.
“I do think it’s blatantly unfair that we ask citizens to save for their retirement, to put money back so you aren’t living just off Social Security. And yet when that time comes that you want to start drawing this money out of certain accounts, then you have to pay a tax on it. Well, that’s wrong.”
As for the food tax, Ramsey defends it as one of the state’s most reliable sources of revenue. Critics say it’s unfair, and affects a much larger proportion of poor people’s spending. Ramsey argues the truly poor sidestep it anyway, by using food stamps.