Gov. Bill Haslam has said he will oppose Republican legislators’ efforts this session to repeal the Hall Income Tax and the state inheritance tax, saying the state can’t afford to give up revenue at the moment.
Legislators see the repeals as popular election year actions and argue that they will prompt more people with capital and assets to retire in Tennessee rather than Florida—another state without an income tax. Look for a compromise in which the “death tax” repeal will be phased in over five years. No taxes on the first million the first year, raise it to $2 million the second year, until the limit moves to $5 million in five years. It would take care of most family farms and small businesses at that level, and the amount of lost revenue could be absorbed by the state budget more easily.
Should Haslam veto the measure, it might set up a confrontation with conservative legislators.