Nov 9 2012
08:48 am

Kelsey, Casada file Constitutional Amendment to Ban State Income Tax:

State Senator Brian Kelsey (R-Germantown) filed a constitutional amendment yesterday to permanently ban an income tax in Tennessee. The "No State Income Tax Amendment," or Senate Joint Resolution 1, would allow Tennesseans to vote in 2014 to clarify the state constitutional prohibition on a personal income tax.

"Tennessee voters overwhelmingly elected state legislators Tuesday who oppose an income tax," said Sen. Kelsey.

bizgrrl's picture

I'm guessing that if this

I'm guessing that if this passes, then in then future when (if) Tennesseans return to their senses another constitutional amendment can be added to override this one.

Not that I think this will pass.

In Blount County the citizens spoke and voted down an increase in the sales tax. Today Blount County government officials are talking about increasing property taxes. One way or another the state/local governments will get more funds.

Average Guy's picture


that which we call a tax
By any other name would cost as much

R. Neal's picture

Correct me if I'm wrong, but

Correct me if I'm wrong, but I don't think they can put this on the 2014 ballot?

I thought a constitutional amendment had to be passed by two consecutive General Assemblies, not just two sessions of the same Assembly?

Min's picture


I am woefully ignorant about the State Constitution. I guess I'd better read up.

R. Neal's picture

Here's what the Tennessee

Here's what the Tennessee Constitution says:

ARTICLE XI, Section 3. Any amendment or amendments to this Constitution may be proposed in the Senate or House of Representatives, and if the same shall be agreed to by a majority of all the members elected to each of the two houses, such proposed amendment or amendments shall be entered on their journals with the yeas and nays thereon, and referred to the General Assembly then next to be chosen; and shall be published six months previous to the time of making such choice; and if in the General Assembly then next chosen as aforesaid, such proposed amendment or amendments shall be agreed to by two-thirds of all the members elected to each house, then it shall be the duty of the General Assembly to submit such proposed amendment or amendments to the people at the next general election in which a governor is to be chosen. And if the people shall approve and ratify such amendment or amendments by a majority of all the citizens of the state voting for governor, voting in their favor, such amendment or amendments shall become a part of this Constitution. When any amendment or amendments to the Constitution shall be proposed in pursuance of the foregoing provisions the same shall at each of said sessions be read three times on three several days in each house.

Somebody's picture

So if I follow that, they

So if I follow that, they would have to pass it once in 2013, wait until after the next election and pass it again in 2015, and only then would it go on the ballot in 2018.

R. Neal's picture

Oh, duh. Never mind. Later on

Oh, duh. Never mind. Later on in the press release:

The "No State Income Tax" Amendment also begins step two of a three-step process of amending the state constitution. Step one occurred when the resolution passed the Senate and the House with bipartisan support of over two-thirds of the members during the 2011-2012 General Assembly. Step two will require a two-thirds vote of the Senate and House during the 2013-2014 General Assembly, which will convene January 8. Step three is a ratification vote by the people on the November 2014 ballot.

So they already passed it in the last General Assembly, apparently under a different bill number.

R. Neal's picture

It appears the previous bill

It appears the previous bill was SJR221. The new bill is SJR1.

jackdlail's picture

Just calling an income tax,

Just calling an income tax, the Hall Tax didn't work? Who knew?

R. Neal's picture

Yeah, the Hall Tax is the

Yeah, the Hall Tax is the Chamber's dirty little secret when they tout "no income tax in Tennssee!"

jackdlail's picture

I suspect it is a bit of a

I suspect it is a bit of a surprise to retirees moving into the state that has "no income tax."

Mike Cohen's picture

Income Tax Ban

Not sure why everyone is acting like this is surprising or evil.

Governors Alexander, McWherter, Sundquist, Bredesen and Haslam have all opposed it. 3 Republicans and 2 Democrats but one united view of an income tax as bad for Tennessee.

And a constitutional amendment goes to the people of the state for a vote.

There's not really a better, more democratic way to deal with the issue...unless you want a "keep our options open, let's not let the people decide" perspective.

Somebody's picture

Your "keep our options open,

Your "keep our options open, let's not let the people decide" argument is such infuriating nonsense. You're just waving the flag while you gloss over incredibly complex issues, and pretending representative democracy has no purpose or meaning.

The bar is already extremely high for passing an income tax in Tennessee. It's so high that we've made it this far without one, and we'll have to run into a fiscal brick wall before we ever get one. Amending the constitution to insure that it will take eight years after hitting a fiscal brick wall just to repeal the amendment and open up the mere possibility of enacting an income tax is nothing but bone-headed stupidity.

The income tax and other systems of taxation are complex issues. We hire elected officials to figure these things out and to pass the laws for us, after (theoretically) taking into account all of the various and conflicting priorities and challenges.

Putting to the voters a referendum on a Constitutional amendment that says "no income tax" is like putting a referendum out there asking voters if they want free ice cream. It will be easy to get a majority to say "yes" without ever considering the costs and potential consequences of limiting our options.

If "letting the people decide" through referendum is such a noble, democratic way of dealing with our state's issues, why not eliminate the legislature altogether and "let the people decide" everything?

Mike Cohen's picture


We're not California. Personally I have a lot of faith in the electorate.

Andy Axel's picture

We're not California.

We're not California. Personally I have a lot of faith in the electorate.

Faith in what, exactly?

This is the same electorate in which <10% of registered voters can even be arsed to show up for primaries, right?

Rachel's picture

The income tax has been

The income tax has been demonized in this state so that it will never pass - or at least never pass in my lifetime - with or without a constitutional amendment.

I have shown folks how much tax they pay under an income tax with a repealed sales tax on food versus what they pay now, and they either refuse to believe me or say "I don't care, income taxes are bad."

Sales taxes are the most regressive (and elastic taxes) we have. They're bad for the taxpayer and bad for the state revenue coffers.

Doesn't matter. Nobody's going to listen to sane arguments on this.

So.. bottom line - I'll vote "no", partly because I don't believe in monkeying with the Constitution unless it's absolutely necesssary.

But it matters not.

fischbobber's picture

Good Post

So.. bottom line - I'll vote "no", partly because I don't believe in monkeying with the Constitution unless it's absolutely necesssary.


Min's picture

Hear, hear.

I wish more people respected the Constitution like that.

Tamara Shepherd's picture


Sales taxes are the most regressive (and elastic taxes) we have.

I believe you meant to say "inelastic" here.

It is the income tax that is elastic.

That is, the income tax produces ever greater revenues for the state without any rate hikes, because even when its rate is unchanged it is still able to capture more taxes every year via taxpayers' ever higher incomes.

The sales tax, in contrast, does not produce more taxes every year--at least not to the degree needed to keep up with the state's ever greater costs--so its rate must be constantly hiked.

For the first 50 years following its inception, the sales tax rate needed to be increased every seven years--and was.

Rachel's picture

Yes, I did. Slip between

Yes, I did. Slip between brain and fingers. Thanks.

Tamara Shepherd's picture


Didn't mean to go on and on about it for your benefit ('cause I knew you knew), but for the benefit of anybody who maybe didn't know.

I think you'll remember, from about ten years back, our desperate need for a state income tax is a subject I can get pretty wound up about.


Tamara Shepherd's picture


KNS ran a story here in the last month or so to the effect that students now pay nearly 70% of their tuition costs at the state's so-called "public" universities, while the state covers barely more than 30%.

According to the 2012 State Report Card released last week, the same thing is happening in the state's K-12 system.

Here's the portion the state is covering in our urban school systems this year (scroll to lower right corner of page):

Memphis City, 40.2%
Davidson County, 28.9%
Knox County, 34.3%
Hamilton County, 34.2%

Statewide, Tennessee covers 46.5% of total costs.

If the wingnuts want to amend anything in the Constitution, they need to start with that clause at Article IX, Section 12 that promises "the General Assembly shall provide for the maintenance, support, and eligibility standards of a system of free public schools."

They're not and they're gonna get their sorry butts sued, sooner or later.

State income tax now.

Up Goose Creek's picture

Hall tax

So would the ammendment outlaw the Hall tax? How much revenue does that produce?

Tamara Shepherd's picture


Governors Alexander, McWherter, Sundquist, Bredesen and Haslam have all opposed it. 3 Republicans and 2 Democrats but one united view of an income tax as bad for Tennessee.

Mike, Democratic Governor Ned McWherter proposed a 4% state income tax--along with cuts in other taxes--in 1992.

And Republican Governor Don Sundquist also supported a state income tax about a decade latter, during his administration, which I really, really can't imagine that you've forgotten already.

As for Bredesen, I think you're aware that most of us here supported Sanders in Bredesen's first race.

Throughout that campaign, you'll also recall that we covered Bredesen's intention to gut Tenncare versus Sanders' support for an IT pretty throughly at k2k (in spite of the fact that yours truly seethed there on "moderated status" most of the time).

Dunno what you're smokin'...

P.S.--You'll also recall that Randy Nichols ran against Bredesen in the primary on a pro-income tax platform. Now really, don't you 'spect that Dem primary was likely decided by the Repub crossover vote?! I certainly do!

P.S.S.--You may also recall that Republican Senator Ben Atchley endorsed a state income tax, too, toward the end of his last term. I clipped and saved his KNS editorial to that effect.

bizgrrl's picture

Thanks for setting the record

Thanks for setting the record straight, Tamara.

fischbobber's picture

The Amendment

Since an income tax has already been ruled unconstitutional, it would appear that the payroll tax ban is the big enchilada here.

It's been a few years since I read the source documents, but it would appear this amendment's provisions for protecting employers with large payrolls, rather than the employees paychecks is what this is all about. Once again, our legislators pull the old bait and switch on an uneducated populace. If it ain't broke, don't fix it, I guess.

Tamara Shepherd's picture


Since an income tax has already been ruled unconstitutional...

Persons using the "unconstitutional" excuse do so based on a 1932 State Supreme Court ruling, Evans vs. McCabe.

The 1932 Court was only able to reach such a conclusion by exercising an extremely liberal interpretation of the language of Article II, Sec. 28 adopted in 1870 that states:

"The legislature shall have power to levy a tax upon income derived from stocks and bonds that are not taxed ad valorem."

The provision simply states that what has now become known as the Hall Tax is an acceptable means of taxation.

Persons who argue that an income tax is unconstitutional claim, on VERY shaky legal grounds, that if the Constitution's framers meant to include a tax on earned income, they would have said it.

This concept is often referred to as the "theory of omission," which you'll recall was the same ploy those opposed to term limits tried in 2006, but the State Supreme Court smacked 'em down.

Since 1932, State Attorney Generals William Leach, Charles W. Burson, and Paul Summers--who served successively--have ALL THREE opined that a state income tax in Tennessee IS constitutional.

The first of these opinions, from Leech, came in response to a question from then Representative Randy McNally on September 2, 1981.

The second of these opinions, from Burson, also came in response to a question from Randy McNally, who was then a state senator, on June 10, 1991 (during Democratic Governor Ned McWherter's term).

The third, from Summers, came in response to a question from Comptroller of the Treasury John Morgan and State Treasurer Steve Adams on October 28, 1999 (during Republican Governor Don Sundquist's term).

I don't know whether current State AG Robert Cooper has been asked to field the question, but I suspect not since I don't think any bill to enact an income tax has arisen since his term began? Not sure.

According to the State AG's site, the office does not publish opinions delivered prior to 2000 online (although we may request them by phone).

I remembered only that at the time I served on the Local Organizing Committee for Tennesseans for Fair Taxation (TFT), we frequently had to explain this point to skeptics, so I looked up the details at TFT's site.

fischbobber's picture

Again, it's been a few years

As I recall from reading the constitution, the state,in a broadly written way, is prohibited from taxing farmers for their crops. This has been broadly interpreted as the state being forbidden from taxing wealth producers(i.e. workers) for the fruits of their labors.

The legality of the state taxing activities involving the transfer of wealth are somewhat less clear. In other words, activities involving the transfer of wealth are legally taxable events, the actual production of the wealth is a non-taxable event. As our economy has changed, what is and isn't taxable has also changed. If this is all clear as mud, then my memory is probably serving me well, for that is what I ended up thinking when I was done.

Periodically I print off copies of the Tennessee State constitution for discussions such as these and as fast as I print them my wife hides them from me. Upon my death, I'm sure whoever cleans out this house will stumble upon what will be by then, hundreds of copies of the document, most cross-referenced in one form or another to the U.S. Constitution and wonder just what the hell was really going on in my life.

Should we return to our constitutional form of taxation, I believe it would likely be a boon to both agriculture and manufacturing if we could get our system in order.

Post Script: It occurred to me while on my bike ride on our better than Chattanooga's bike route and greenways today that Tennessee marijuana growers should be allowed to grow and ship marijuana to Washington state and Colorado under the interstate commerce clause of the U.S. constitution. The revenue derived by the growers would be non-taxable by the state of Tennessee with or without a constitutional amendment prohibiting an income tax.

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