It's time to remember that it was the great Cordell Hull of Tennessee (then a congressman, later secretary of state) who led the successful campaign to adopt the 16th Amendment to the U.S. Constitution in 1912, creating the federal graduated income tax. Tennessee is now at the point in its own historical development that we need a state income tax to provide for our citizens' needs.
Today, only nine states do not have any kind of state income tax. Of those nine, two have no reliable alternate ways of raising revenue: North Dakota and Tennessee. The other seven have natural resources, travel, or tourism as a means of raising moneys to pay for public services.
Worsening the situation is that almost 58 percent of Tennessee taxes come from the regressive sales tax: 6 percent, with additional local-option capabilities of two cents -- one of the highest rates in the nation. And studies suggest that regressive sales and excise taxes are among the major reasons why a state may fail to provide necessary public services.
In some categories, such as state support for K-12 education and higher education, Tennessee ranks between 46th and 50th out of all 50 states. We Tennesseans deserve better.
In 1942, in the middle of World War II, America needed to expand government spending to defeat the militarily aggressive nations of Italy, Germany, and Japan. Americans came behind a plan proposed by Beardsley Ruml, treasurer of the Macy Department Store chain and a lifelong Republican, to broaden the income tax and establish withholding. The number of contributors to the income tax rose, by some estimates, from only 5 percent to 75 percent.
The point is that citizens of a democratic republic can make up their minds to pay more in taxes in order to fund vital, necessary public needs (especially if "more" -- in the way of a new state income tax -- might mean "less" in overall taxes for Tennesseans, as a number of studies suggest).
Now in Tennessee the foremost public needs include, as mentioned, K-12 education and higher education (the latter of which has taken drastic funding hits every year since 1988-1989), decent health care for disabled, poor, and uninsurable Tennesseans, reliable at-home care for the elderly, and the promise of a decent quality of life for young Tennesseans (including, I don't mind saying, my seven-month-old son).
It's time to act responsibly to reform the regressive, unfair tax system in our state. Passing increases (of either one-half or three-quarters of a cent, both of which have been proposed) in the highly regressive sales tax is unfair and unjust. Worse, such a course avoids addressing the state's structural tax problem whereby bordering states with lower sales-tax rates are enticing retail customers, and tax-free mail-order and Internet sales are further crimping the source of revenue.
We need to face up to the threatened prospects for Tennessee, its citizens, and its public services. Faculty members in higher education are severely demoralized and fleeing the state, and the word is out that public higher education in Tennessee has no future at all. That system -- to which I have dedicated my life and pledged the future of my wife and new son, and the thousands of students I have taught -- is falling apart. We can all make a difference by supporting the Rochelle/Head graduated income tax bill (SB1920, HB1948) as the only realistic, fair, responsible, and long-term solution to our state's budget crisis.
It's time for all of us -- rich, middle-class, or poor; employers and employees; blacks, immigrants, and whites; native-born Tennesseans and migrants from other states; men and women; the young, the middle-aged, and the elderly; Democrats, Republicans, and independents; West Tennesseans, Middle Tennesseans, and East Tennesseans -- to join in support of real, lasting, and permanent tax reform.
Patrick D. Reagan is a professor of history at Tennessee Tech at Cookeville.