Tuesday, April 20, 2010

Calling a Tax Hike Something Else

The Governor can make politically stupid choices now, he isn't up for re-election:

Let us be honest and straightforward about what the Governor is proposing. He may disguise this manuver all he likes, but lifting the sales tax cap is in fact a tax hike. The Governor wants the sales tax cap to be lifted so that he will not only be able to avoid giving State employees a pay cut, but will be able to continue those employees' regular bonuses. Meanwhile, many Tennessee small businesses are struggling to stay afloat. The proposed tax increase would impair their ability to purchase equipment-some family businesses might even have to choose between buying necessities and hiring employees.

The real problem with the Governor's tax increase proposal is that he is proposing to raise taxes and avoid a five percent pay cut for State employees. As I said in a previous column about this matter, no one wants to tell your employees you need to cut their pay. The reality which the State must acknowledge is that the majority of Tennesseans don't work for the State, and many private sector Tennesseans trying to scrape by in this depression have seen their hours or their pay cut (or both). Some have lost the benefit of paid holidays-something many took for granted in recent times-while others have lost some or all of their regular paid vacation.

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