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 [ Text Menu: Today's Stack of Stuff | Audio | About Ralph | Contact Ralph | Ralph Rant! ]December 20, 2014 

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The Ralph Rant



The moral case against the Hall Tax
Ralph Bristol
December 3, 2014

Opponents of eliminating Tennessee’s Hall tax wonder why Tennessee would want to eliminate a tax that affects “only the richest one percent?” Maybe it’s because we want to give more than just lip service to equal treatment under the law, including tax law, which seems to be immune to the 14th amendment, but that’s another topic altogether.

While we shouldn’t be singling out rich people for special treatment, does that mean we should be singling them out for special punishment? How about if we simply treat them the same as everyone else?

I realize the Hall Tax doesn’t specifically target rich people. Rather, it targets specific types of income, but why is it such a popular argument that a tax “only affects one percent of the people?” Earlier this year, the Institute on Taxation and Economic Policy released an analysis showing that the “only Tennesseans to meaningfully benefit from eliminating the tax” would be the state’s richest 1 percent.

How did it become the high moral ground for 99 people to gang up on one? Money can buy some protection, but not enough to overcome the collective voting power of the other 99% if they are determined to single you out. If you’re among the richest 1 percent, you can give money to candidates and hope to buy some influence, but if public sentiment is overwhelmingly against you, only a moral opposition to lynching will save you.

But that moral opposition is nowhere to be seen. Rather, the elimination of a tax that burdens only one percent of the population is condemned by opponents as “benefitting only the top one percent.” True, if only one percent of the population is targeted by a tax, a bullet, a bomb, or some other instrument of pain, then eliminating that pain will only “benefit” that one percent.

If there were an “important source of revenue” that “only” targeted the smallest ethnic minority in the state or country, or the shortest or tallest 1 percent, or perhaps the most beautiful or ugliest one percent, wouldn’t there be a moral outrage about the majority ganging up on the minority? Or shouldn’t there be?

Is equal treatment under the law a constitutional and moral dictate – unless it’s the richest one percent? Is it not only okay, but morally superior to specifically screw the richest one percent – as if they are evil people who need punished? Liberals want not only to rob them, but to do so with a sense of piety. Does Gov. Haslam have no interest in rebutting that?

Governor Haslam says the $300 million dollars that state would give up, of the $15 billion in expected revenue (2 percent) is too much for the state to give up, even if the Hall Tax was phased out over time, even as he phased out the smaller inheritance tax.

Haslam is not just saying he won’t give up 2% of the state-generated revenue to stop the targeted taxing of the state’s richest 1 percent (including himself of course), he’s not even trying to make the argument that it would be the morally right thing to do, if only Tennessee could afford it.

First, the state can afford it, especially if it’s phased out, like he phased out the Inheritance tax, and second, the moral case is obvious if you start with the belief that “targeted” taxes against any small minority or residents or citizens, though democratically expedient, are anything but pious.

The Institute on Taxation and Economic Policy argues that the Hall Tax is…“a rare progressive feature of a tax system that falls disproportionately on the poorest Tennesseans,” implying that it’s proper because it balances an otherwise regressive tax system. I’m not sure one can argue that a state that gets 53 cents on the dollar through the sales tax is overly dependent on the allegedly regressive sales tax, but I know it doesn’t justify a “progressive feature” that affects only the top one percent. Progressivity that stops with the top one percent is still mob rule, with 99 wolves negotiating “what’s for dinner” with one sheep.

 I’ve heard all sorts of economic arguments about which people and how much of their money is dissuaded from settling in Tennessee because of the Hall Tax, and they are sound economic arguments, but they ignore “the rest of the story.”

 I would like to hear Gov. Haslam at least acknowledge, if not make, the moral case for ridding the state of the Hall Tax.

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