Fri
Apr 13 2012
09:44 am
By: R. Neal  shortURL

The State House passed two tax cuts yesterday.

The first reduces sales tax on groceries from 5.5% to 5.25%, a whopping .25% reduction, or 25 cents on every $100 worth of groceries. The impact on state revenues will be about $21 million, according to the bill's fiscal note.

The second tax cut phases out the state's estate tax, which will result in a $95 million per year reduction in state revenues. The tax is estimated to affect fewer than 1,000 families.

So do the math. Let's say 1,000 families equals 5,000 people. That means less than 1/10th of a percent (0.08%) of the state population will get nearly $100 million (about $20,0000 each) in tax breaks, while the other 99.9% will get a $21 million break (about $3.50 each), 25 cents at a time.

Or to summarize, the 0.1% get a $20,000 tax break and everybody else gets a $3.50 tax break. How very Republican!

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bizgrrl's picture

That's what I'm talking

That's what I'm talking about.

CathyMcCaughan's picture

Math is a liberal conspiracy.

Math is a liberal conspiracy.

rikki's picture

The real impact of that

The real impact of that grocery tax cut will be that consumers will see none of it, and retailers will simply send less money to the state and pocket the difference. It's the classic steal-the-rounding-error heist.

metulj's picture

That's a completely incorrect

That's a completely incorrect view of how the tax is actually collected. You can't do it if your receipts have the tax as a line item on them. Don't assume the worse.

rikki's picture

It's not a view of tax

It's not a view of tax collection. It's a view of aggregation. The change is so trivial as to be invisible to consumers. It will not give anyone more purchasing power nor alter price points.

Only retailers will see the difference, and they'll likely see it as an opportunity to put a little more vigor in the vigorish they add to prices when rounding off to the nearest number ending in 9. We won't know which items got more expensive or why, but Pilot and Kroger and other big retailers will surely find ways to move the quarter per $100 from our wallets to their profits.

This was not done to benefit consumers. It hurts the state. It only makes sense as an opportunity for big retailers and their shareholders.

metulj's picture

You have become a pure cynic.

You have become a pure cynic. Listen, I want to abolish the tax on food, but why would you think that, for instance, the Three Rivers Market, a collector of sales taxes, would pump the bottom line with this money?

rikki's picture

When I explicitly say "big

When I explicitly say "big retailers" and mention shareholders but get asked about a small retailer that is literally owned by its customers, there is really nowhere to go but cynicism.

metulj's picture

I own shares and the coop is

I own shares and the coop is a lot bigger a business than you seem to grasp.

rikki's picture

The sky is blue.

The sky is blue.

metulj's picture

If and only if you can parse

If and only if you can parse "blue" like you've parsed everything else of late.

rikki's picture

You're just too smart for me.

You're just too smart for me. I have no choice but to admit you are right. Because TRM will not seize the opportunity to exploit its customer-owners, we can trust Pilot to be as ethical in its operations. Whatever is true of a community cooperative is true of large corporations. All hail our state's Republican leadership!

metulj's picture

Wow. You and Nixona on the

Wow. You and Nixon on the strategic use of irrationality, hoss.

rikki's picture

Says the guy who is trying to

Says the guy who is trying to put Three Rivers Market on the same level as Kroger and Pilot. To the extent that you are even interested in the thread topic, as opposed to just contradicting me, you are defending Republicans and big corporations. There might be a clue for you lurking in there.

metulj's picture

You're nuts. I want to

You're nuts. I want to eliminate the sales tax on food. That's my position. This is a half measure. The untenable position that you are holding is predicated on a ignorance of how the sales tax is collected in TN and the presumption that anyone would immediately exploit the 0.25% for profit.

rikki's picture

I'm mocking this "half

I'm mocking this "half measure," which is an incredibly generous description for shaving off a meager bit of the food tax in even tinier steps. A half measure would be a distinct improvement. I favor elimination of the sales tax too, and if you've somehow divined otherwise, it's just because you're so emotionally invested in finding something to disagree about. You've made it clear that you'll dispute what I say regardless of whether you actually disagree or have even bothered to comprehend.

metulj's picture

You still haven't addressed

You still haven't addressed your lack of understanding of how sales taxes are collected ( or even derived, it seems). You also are ascribing actions to parties without evidence either historical or observed. Those are facts. Nothing emotional at all.

rikki's picture

Actually, I did address that,

Actually, I did address that, and doing so caused you to switch your argument from 'you don't understand how taxes are collected' to 'I'm going to pretend you are talking about Three Rivers Market.'

There is plenty of historical and observational evidence showing that Haslam will use his office to benefit Pilot Corp. Pilot probably does not even need to adjust their pricing strategy to take advantage of this opportunity. There's probably a whole body of consumer-behavior research showing a perceived increase in purchasing power, even if only by 0.25%, results in an even larger increase in purchases.

This "tax cut" is really just a retailer's gimmick adopted by the General Assembly.

metulj's picture

You've become purely

You've become purely political. You refuse to address how sales taxes are collected off receipts. You just can't round up or increase your prices without raising the tax paid by the consumer. It would be inflationary in both respects.

rikki's picture

What is your position on this

What is your position on this issue? Why did the state government opt to reduce the tax on food by so little and to spread the change over several years?

Pam Strickland's picture

Rikki, have you lost your

Rikki, have you lost your mind?

rikki's picture

Posting something like that

Posting something like that without bothering to even say what it is that you find objectionable is pure rudeness.

Rachel's picture

Could you two (not you Pam)

Could you two (not you Pam) take it outside? I keep clicking on new posts, thinking I'll see something interesting and all I see is you two bickering.

Min's picture

I've read this exchange twice.

And I still can't figure out what it's about, other than two people talking past each other with increasing animosity.

BTW if you want an example of the Guv acting to benefit Pilot Oil, you need look no further than his decision last year to join other governors in opposing mandated improvements in fuel economy for cars.

Cha-ching!

Pam Strickland's picture

Context, Rikki, context.

Context, Rikki, context.

redmondkr's picture

Thanks Rikki for throwing

Thanks Rikki for throwing cold water on all my plans to spend my new-found windfall.

Min's picture

Indeed.

Spend that quarter wisely, 99%.

Andy Axel's picture

the other 99.9% will get a

the other 99.9% will get a $21 million break (about $3.50 each), 25 cents at a time.

Haslam: "Here's a quarter back! Go Vols!"

Min's picture

I have a question.

Some of the legislators have said that the purpose of phasing out the estate tax is to keep wealthy retirees in Tennessee. Where, exactly, is the benefit to Tennessee in keeping retirees, even wealthy ones, in the state? They're retired, so they're not starting or running businesses, they don't have children who attend public schools, they don't contribute to the state pension, and they tend to use a singificant share of health and related services. Sure, they eventually die, but the tax cuts mean the state will not benefit.

I just don't get it.

R. Neal's picture

Actually there's some logic

Actually there's some logic to that. Attracting retirees that is. It's called the "mailbox economy," referring to retirement checks. Seniors don't use many services, as you note, but still spend money and pay taxes. As for the health and medical services, those are almost 100% paid for by federal dollars flowing in to the local economy.

Min's picture

Okay, that pisses me off.

But it makes total sense.

metulj's picture

Seniors don't use as much

Seniors don't use as much services? How so?

R. Neal's picture

Don't commute to work every

Don't commute to work every day, don't have kids in schools, for example.

metulj's picture

Use enormous public health

Use enormous public health resources, for example. Drive discretionary miles which are more wasteful, for example. Require access assistance, for example. Taxes tend to go up where seniors settle, not the other way around. There's a long term study of this in South Florida.

R. Neal's picture

Drive discretionary miles

Drive discretionary miles (like everyone) to spend discretionary funds they have in abundance. Health and social services they use create federally funded jobs. I'm guessing Florida will be happy to take any seniors who don't like it here.

CathyMcCaughan's picture

I know this is a touchy

I know this is a touchy subject at least partially because we are not spring chickens ourselves. Aging bible belt populations, for the most part, are more politically active. They are active in fighting AGAINST public education and FOR legislation based on their fear of the world, fear of people who don't look and think like they do, and lack of fear about the future of this planet.

R. Neal's picture

P.S. tax rates or tax

P.S. tax rates or tax collections, because seniors tend to buy or build more expensive properties?

metulj's picture

They tend to go for

They tend to go for condos/co-ops in Flordia which are taxed at lower rates. I know the "general feeling" is that seniors consume less resources, but scholars, especially folks who look at Medicare and uneven access to it, will tell you that the opposite is true. I am not saying "put granny on the ice floe," but the concept behind things like population pyramids is that certain age cohorts tend to require more support. Those at the bottom of the age range and at the top, with everybody in the middle paying.

redmondkr's picture

I read recently that the

I read recently that the average age of Fox News viewers is 65.

Every time I go to my cardiac rehab sessions, I have to sneak around and change the channel on the old ducks' two TVs to any other channel. I do it more often since Joanne left. She always insisted on channel 8 so she could watch her soaps from the treadmill.

fischbobber's picture

The quarter

It costs a quarter to use the grocery cart at ALDI's. Perhaps this is what our governor had in mind. We can save money by buying four dollar a gallon gas at Pilot, driving an extra 20 miles to ALDI's using our quarter to rent a shopping cart and save two dollars and eighty seven cents for a net loss of four dollars and twenty- two cents. God bless our governor and the free market. Now we know for sure that sending our children to Young Life teaches them to do the right thing!

lovable liberal's picture

The question

For members of the 99 who still support Teapublicans, the question is: How cheaply can your support be bought?

'Cause this is waaay lower than a mess of pottage.

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