Advocates for tax changes say Tennessee off course
Bredesen, who is seeking re-election and has ignored calls to change a tax system that includes the nation’s highest average tax on food, could not be reached immediately for comment. He told The Associated Press in an interview earlier this month that he didn’t plan any new tax initiatives in 2006 although he said he would like to find a way to reduce the sales tax on food.
Representatives of Tennesseans for Fair Taxation and the Tennessee AFL-CIO held a series of Thursday news conferences about the report, “Pulling Apart: A State-by-State Analysis of Income Trends,” by the Economic Policy Institute and the Center of Budget and Policy Priorities.
The report shows the incomes of the poorest 20 percent of families nationally grew by an average of $2,660. Meanwhile, the incomes of the richest fifth of families grew by $45,100, the study by the Washington-based groups said.
Trudi Renwick, an economist with the union-backed Fiscal Policy Institute in New York, said wages at the bottom and middle of the scale have grown only minimally over the past two decades while the wages of the best compensated employees have grown significantly. She said globalization, the decline of manufacturing jobs, the expansion of low-wage service jobs, immigration and the weakening of unions have hurt those on the lower end of the economic scale.
The poorest fifth of families nationally, the report said, had an average income of $16,780 from 2000-03, while the top fifth of families had an average income of $122,150 — more than seven times as much.
The study shows that in 38 states, incomes of high-income families grew significantly faster than the incomes of the lowest-income families. Tennessee, with a ratio of 7.72 to 1, was third, behind New York and Texas. Wyoming had the smallest disparity: 5.16 to 1.
While income inequality has grown across the country, Tennessee was the only state to make the top 10 list of all six rankings in the report.
“Something is setting Tennessee apart from the rest of the nation, and that something is state-level policies that fail to value the hard work of average Tennesseans,” Lizajean Holt, a member of Tennesseans for Fair Taxation, said in a statement. “It’s no great mystery for example that Tennessee, with the nation’s highest average food tax, has one of the most inequitable tax systems in the nation. In fact, low-income families in Tennessee pay over three times the taxes as those at the top.”
Dave McIlwaine, treasurer for Tennesseans for Fair Taxation, said he was baffled by Bredesen’s refusal to push tax changes.
“It just seems to me that Bredesen just doesn’t seem to get it,” McIlwaine said in a telephone interview. He said the Democratic governor just seems to be “poking a sharp stick in the eye of people who put him in office in the first place.”
He also questioned why Bredesen chose to say that “under no circumstances would he consider any kind of tax reform. It is just very puzzling.”
Jerry Lee, statewide president of the AFL-CIO, said Tennesseans “need to ensure that workers get fair wages and benefits. We also need to ensure that large employers provide health care to their employees instead of cost-shifting it onto state government.”
He said more than 30 states are looking at following Maryland’s lead in requiring large employers to either provide health care to their employees or help pay to support the state Medicaid program “where many of those employees end up.”
AARP Tennessee is among groups supporting a tax law change that would reduce Tennessee’s 8.4 percent average tax on food.
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On The Net:
Tennesseans for Fair Taxation: http://www.yourtax.org