Tax Coalition to Tennessee Gov. Bill Haslam: Tennessee is still at a Disadvantage

by Charles Chamberlayne - No Comments
Posted on January 12th, 2012 3:19 pm

For Immediate Release: Wednesday, January 11, 2012
AFBI Contact: Charles Chamberlayne, 202-969-2444 ext. 505
charles @americanfamilybusinesses.org

Tax Coalition to Tennessee Gov. Bill Haslam:
Tennessee is still at a Disadvantage
Tax Coalition Applauds Governor’s Legislative Announcement
& Pushes for Full Inheritance Tax Repeal

WASHINGTON, D.C. – Following Tennessee Governor Bill Haslam’s announcement regarding his legislative priorities for 2012, the American Family Business Institute (AFBI), Americans for Tax Reform (ATR), Americans for Prosperity (AFP), National Taxpayers Union (NTU), and the Beacon Center of Tennessee, today released the following statement: 

“Governor Haslam is right; the Tennessee death tax is a job killer that chases family businesses away from the state. However, even with an increased exemption Tennessee will still be at a competitive disadvantage to States like Florida that do not have death taxes. While we applaud the Governor for taking a step in the right direction to make estate tax reform a priority, we urge him and the legislature to completely repeal the tax rather than raise the exemption.”

Last month, the American Family Business Institute (AFBI), a trade association representing family business owners and farmers, Americans for Tax Reform (ATR), an organization devoted to opposing any federal or state efforts to increase taxes, Americans for Prosperity (AFP), an organization of grassroots activists on fiscal and regulatory restraint, the National Taxpayers Union, an organization against government growth and wasteful spending, and the Beacon Center of Tennessee, a research organization dedicated to free market policy solutions, sent a letter to Governor Haslam expressing grave concern regarding his statements indicating a reluctance to repeal the Tennessee inheritance tax (or estate tax) and urged him to quickly repeal the tax.

Today, the Associated Press reported that Tennessee Governor Bill Haslam will include reductions to Tennessee’s inheritance tax in his legislative priorities for the year. Haslam stated, “There's a whole lot of people who used to live in Tennessee who don't anymore because it's cheaper to die in Florida. I can tell you a whole lot of people who spend less than half their year in Tennessee to avoid that estate tax specifically.”

Many seniors flock to states like Florida, to avoid taxes on their hard-earned wealth. According to a recent study by Art Laffer, a world renowned economist, Tennessee’s inheritance tax is the single greatest reason why wealthy people do not want to live in Tennessee. The Tennessee tax burden ties up working capital in expensive estate plans and life insurance policies. The study also notes that Tennessee’s inheritance tax has already reduced the state’s gross domestic product (GDP) by up to $18.2 billion over the last ten years.  Economic growth from the elimination of the state’s inheritance tax was projected to add at least $7 billion to state and local revenue over the last ten years. The tax currently accounts for less than 1 percent of total state revenues.
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