Ed Wood "The Right Stuff" Published July 24, 2002

Death and taxes

The anti-income-tax people are shouting "victory!" Sorry, not so. We just got caught in one of the oldest of political ploys. Create a crisis, either real or imaginary, and then offer a real or imaginary solution to the crisis you just created. Usually at a price. A big price! The Nashville Tennessean calls the recently enacted Cooper-Curtiss "compromise" tax bill the "largest tax increase in the history of the state of Tennessee." Of course it is. But so was every one of the income tax schemes that have been proposed over the past three years. But the news media, being supportive of those who are supportive of the income tax, never called it that.

So the price we pay under the Cooper-Curtiss bill is that our state sales tax goes from 6 cents to 7 cents. A one-cent tax increase. That isn't much. What's a penny? But when that 1 cent goes from 6 cents to 7 cents, or from $6 to $7, that's an immediate increase of 16.7 percent! How many immediate 16.7 percent pay raises have you had in the last year or so? But the sales tax increase is expected to make up only 2/3 of the required $900 or so million, with most of the remainder coming from lawyers, doctors, smokers and drinkers. A strange group of bedfellows if there ever was one!

The previous crisis attempt at shutting down the state parks didn't work. It wasn't a big enough crisis. So this time they added the schools and universities, plus the furloughing of some 22,000 non-essential, and/or non-existing, state workers. Even a casual observer of the political scene should have detected this scam. No politician is going to alienate his or her most loyal supporters, the non-essential state employees, during an election year. So naturally the Cooper-Curtiss solution had to include full back pay for those on furlough, which it did.

The "no additional tax" people lost. The "spending reformers" lost. But didn't the "no income tax" people win? Not for a moment! The strategy is already being formulated to convince us that talk radio and their horn-honkers pressured the legislature into voting a flawed tax bill, so the subject of an income tax must be revisited. House Speaker Jimmy Naifeh has already promised to bring it back again, and again, and again. Why? Because even though an income tax is hated by the majority of our citizens, it is the darling of the politicians. Again, why? Because it is the type tax that is easiest to manipulate for political purpose. It can be crafted to reward friends and punish enemies. It can be made to extract the most tax from the fewest potential voters. Remember Speaker Naifeh's statement that under his income tax proposal, 60 percent of the voters would be paying less? So if his purpose was to raise an additional $1.2 billion, then what would that do to the remaining 40 percent? Doesn't matter, because the 60 percent paying less would be enough to assure re-election. (This isn't rocket science, you know.) Don't forget, 5 percent of us pay 50 percent of the federal income tax, and 50 percent of us don't pay any. So Speaker Naifeh, et al, have a great example to work from.

Yes, the tax-and-spend politicians will be back at it again next year, but this time from a sales tax base of 7 percent, rather than 6 percent. And when it happens, please compliment the editor of this newspaper for having such a brilliant political analyst on staff.

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Ed Wood is a resident of Sparta, TN. His column is published each Wednesday in the Crossville Chronicle.