Imagine the horror when members of the Haslam family opened their Wall Street Journals to discover that Bill was being attacked in an editorial as an impediment to a tax cut.
Arthur Laffer, author of the Laffer curve, is the darling of the Wall Street Journal editorial page. He famously proposed the Republican mantra that cutting taxes increases revenue. He was invited to speak to the Tennessee House Republican Caucus by Speaker Beth Harwell and he made the case for repealing the state inheritance tax—or as Republicans call it, the death tax. He quoted from a study he did comparing Florida, which doesn’t have an estate tax, and Tennessee and made the case that in the long run the state benefits by having people retire to Tennessee rather than move to Florida to avoid their heirs being subjected to the tax. He said the study revealed that people retired to Florida at a much higher rate, per capita, than Tennessee because of estate taxes.
Gov. Bill Haslam worried about cutting taxes given the state of the economy and the budget but agreed the tax could be reduced over a period of years. The House Republicans want to set up the schedule to phase it out and approve it now rather than do it one year at a time. One argued that you do it when you have the votes; you don’t know what will happen in future years.
Haslam’s caution did not go unnoticed and he got ripped in a Wall Street Journal editorial quoting from Laffer’s study and saying “the main obstacle to reform in Nashville is GOP Governor Bill Haslam…”
Haslam fired off a letter to the editor, published March 29, saying he was not against lowering the estate tax and that he was working with the Legislature in a “thoughtful and realistic approach to eliminate” the tax “as Tennessee slowly recovers from the economic downturn.”