Tennessee State Republicans Racing to Raise Gas Taxes

Tennessee State Republicans Racing to Raise Gas Taxes

By Steve Hunley

Say it ain’t so. Republicans raising taxes? Tennessee’s Republican governor, Republican-controlled state senate and Republican-controlled house of representatives are moving with lightning speed to raise taxes on gasoline and diesel fuel. As it stands now, the gasoline tax would increase by 28% while the tax on diesel fuel would increase 65%. This means Tennesseans will very likely be paying more at the pump soon.  To make the tax increase more palatable, legislators have changed the original language to make the increases incremental.  All of us have been told because the governor has proposed dropping the sales tax .5% on food, as well as small reductions in the taxes on business and stocks and bonds, folks will come out about even.  Now that’s just plain wrong.

First of all, I’d like to meet the average family who will break even, much less come out ahead under this proposal.  The average family owns no stocks and bonds, unless through retirement accounts.  For working families, the miniscule reduction in the sales tax – – – and Tennessee has the second highest sales tax in the nation – – – will not offset the increase in the gasoline tax.  One can count on the folks who sell gasoline to add a few pennies to the price of gasoline for their own pockets as the tax kicks in; furthermore, when the price of gasoline begins to rise again, folks are going to be complaining after the fact.

No, the average family isn’t going to come out even or ahead and working folks surely are not going to break even. For another thing, the rise in the price of diesel fuel means the cost of goods purchased will rise for consumers. Literally almost everything delivered to grocery stores for sale arrives by truck and those trucks are powered by diesel fuel.  That cost will be passed onto the consumers.  Do you suppose the .5% drop in the sales tax on food will help you break even?  Of course for those feeding and clothing their families it will mean little, as the sales tax on clothing and necessities will remain the same, but these folks are telling us we will break even.

The notion, advanced by some good government folks, note the gasoline tax hasn’t been raised since 1989, which I find to be a very poor argument for raising any tax, especially when the State of Tennessee is projected to have a $2 billion surplus at the end of this fiscal year.  Do you think you are under-taxed?

Americans pay $1.4 trillion in income taxes; for those working for an employer, workers pay an additional 7.65% tax for Social Security and Medicare.  In 2014, the government collected $1 trillion in payroll taxes.  Americans pay $560 billion in property taxes annually.  The federal government collects $93.4 billion in excise taxes, covering fuel, alcohol, cigarettes and plane tickets.  The federal government get 7.5% of the purchase price for every airline fare sold and 18.4 cents for every gallon of gasoline sold.  Yet in one incarnation of Haslam’s gas tax hike, the administration opened the door to allow city and county governments to raise local property and sales taxes by local referendum.  Keep in mind Knox Countians already pay almost 10% on every thing a person can purchase.

The hike is going to be felt by those living on fixed incomes, as well as working families.  For those who have done pretty well, as usual, they’ll feel it less than anyone.

If you have an opinion about the gas tax hike, you better get on the phone or peck out an email in a hurry.  Stating your outrage after the fact on your Facebook account isn’t going to do a thing, except prove you weren’t paying attention when the legislature was getting ready to pick your pocket.

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