Bradley legislators respond to Hall tax letter


Posted 11/28/17

A “Letter to the Editor” critical of the Tennessee General Assembly’s repeal of the Hall income tax has drawn the collective ire of Bradley County’s four-member legislative delegation.The …

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Bradley legislators respond to Hall tax letter


A “Letter to the Editor” critical of the Tennessee General Assembly’s repeal of the Hall income tax has drawn the collective ire of Bradley County’s four-member legislative delegation.

The letter, written by a former chairman of the Bradley County Democratic Party, was published in the Nov. 19 edition of the Cleveland Daily Banner. All four state lawmakers representing the local area are Republicans.

The GOP response was submitted to the Banner and titled “Bradley Delegation Joint Statement.” It is signed by state Rep. Kevin Brooks (R-Cleveland), District 24; state Rep. Dan Howell (R-Georgetown), District 22; state Sen. Mike Bell (R-Riceville), District 9; and state Sen. Todd Gardenhire (R-Chattanooga), District 10.

Carl Lansden, a former chair of Bradley County Democrats, wrote the Nov. 19 letter. In it, he blamed Bradley County’s legislative delegation for its role in helping state lawmakers to repeal the Hall income tax whose revenue is split between local communities and the state general fund.

Lansden linked the Hall tax repeal to a 29-cent property tax hike this year by the Cleveland City Council. He said its need was to help offset the loss in municipal revenue caused by the Legislature’s actions.

Lansden contends the city of Cleveland lost $3 million in state revenue due to the repeal. The legislative delegation statement counters that Hall tax revenue accounted for less than 1 percent of the total state budget, and less than 4 percent — on average — of local community revenues, and less in Cleveland. 

Lansden’s letter suggested naming the city tax hike on behalf of the local legislative delegation.

“I would like to encourage the City Council to provide an identifying name for the tax increase,” Lansden’s letter cited. “Call it the ‘Bell, Gardenhire, Brooks and Howell Tax.”

The facetious suggestion angered the Bradley County foursome, and their written response indicated as much.

The statement by Bell, Gardenhire, Brooks and Howell launched into philosophical differences between the two political parties.

It began, “A recent letter to the editor criticizing the work and tax cuts of the Tennessee General Assembly perfectly frames the fundamental disagreement between Democrat and Republican principles: While Democrats believe in higher taxes and hold a ‘government knows best’ attitude, Republicans advocate for lower taxes for all and firmly believe as much money as possible should remain in your wallet to spend on those things you deem most important.”

Although the legislative delegation statement by the local legislative team was labeled a media press release, it reads more as a “Letter to the Editor.” For this reason, the document is published in full in today’s edition of the Banner on the Opinion page that can be found on Page 4.

The legislators’ joint statement also points to the governing body’s track record of cutting taxes since 2011.

“… The Republican-led Legislature has cut more than $800 million in taxes, returning money that would have gone straight to the government directly back to the pockets of Tennessee citizens,” it reads. “These cuts include eliminating the gift tax and inheritance tax, cutting the tax on groceries multiple times, lowering property tax owed for veterans, the disabled and the elderly, and cutting the franchise and excise tax to both support current companies and help recruit new industry to Tennessee.”

The Hall income tax is a levy on interest and dividend income from investments. It is the only tax on personal income in Tennessee. Prior to 2016, the tax rate was 6 percent.

In 2016, the state reduced the rate to 5 percent. Based on Gov. Bill Haslam’s IMPROVE Act, the Hall income tax will eventually be phased out over the next few years. Its reduction will take place in 1 percent increments until Jan. 1, 2021, at which time it will be fully repealed.

According to the legislators’ statement, the Hall income tax — in place since 1929 — “… unfairly punishes entrepreneurs, business owners and seniors who rely heavily on their invested retirement income to make ends meet by levying a tax on capital gain, dividend and interest income.”

The Republican lawmaker statement continues, “Taxing those who have worked hard their entire lives, who have been fiscally responsible and frugal in their budgets, and who have saved for their futures is simply not the Tennessee way.”

Of Lansden’s claim that the Cleveland City Council was forced to hike property taxes partially in order to offset the loss in state revenue ($192,372)  afforded by the Hall income tax, the Bradley County legislative delegation’s response reads, “If a local government chooses to raise taxes to make up for that slight difference, the blame solely rests on their own shoulders for raising taxes on hardworking Tennesseans instead of cutting back on their own government spending.”

The statement claims legislative efforts to reduce taxes have created 365,000 new private-sector jobs in Tennessee since 2011. 

It also cites, “… Thanks to things like tort reform, the overhaul of our workers’ compensation system, and phasing out the Hall income tax, more citizens have a job today than at any single point since Tennessee became a state in 1976.”

The statement closes, “These accomplishments do not appear out of thin air; they happen because Tennesseans have chosen to elect state officials that understand the importance of an efficient government that manages our finances in a commonsense way, just like a business or a family has to do every single day. As a state, we are constantly working to keep taxes low, keep our spending in check, and keep our state finances in order.”

It continues, “Our vote to phase out the Hall tax is a massive victory for Tennessee taxpayers, and we are proud to stand with our colleagues in eliminating this tax that unfairly hurts senior citizens (who pay nearly 50 percent of the total Hall income tax in Tennessee), our entrepreneurs, and our job creators. By cutting the Hall tax and reducing additional taxes in other areas, our state can fulfill its status as the nation’s friendliest environment to grow a business, raise a family, and plan for a future — all while being uninhibited by government regulations, burdensome red tape, and excessive taxation.”

The Brooks-Howell-Bell-Gardenhire statement closes, “Repealing the Hall tax is, and will continue to be, the right choice for Tennessee’s future.”

The full text of the legislators’ joint statement can be found as a “Letter to the Editor” on the Opinion page of today’s edition.


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