It’s “a matter of fairness,” U.S. Sen. Lamar Alexander says.
The federal government shouldn’t punish taxpayers in states like Tennessee because their legislatures didn’t adopt a state income tax.
Yet that is precisely what Uncle Sam is getting ready to do unless Congress acts. Alexander is co-sponsoring a bill to see that Tennessee taxpayers get a fair shake.
The Volunteer State saw fit long ago to base its budget on income from a state sales tax rather than a state income tax. Several other states, like Nevada and Washington, have done the same.
For the past decade, our state and local sales tax payments have been deductible expenses on our federal income tax returns. The agreement allowing the deduction had to be renewed every two years.
But as part of the December budget accord, Congress failed to renew the deduction. Unless Alexander and those who agree with him can sway Congress, Tennessee taxpayers will be socked with a major income tax increase.
Why should Congress care how a state’s tax system is based? Tax experts say a state income tax is fairer than a state sales tax, but that’s not the issue here.
Congress has no business telling a state how to raise money. We can hope that our national legislature is not so fractured by party politics that it cannot see the plain injustice of the situation.