Some want to end cuts on TN food tax - WSMV Channel 4

Some want to end cuts on TN food tax

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NASHVILLE, TN (WSMV) -

Last year, state lawmakers cut the food tax for the first time in five years, but now some are saying the tax cuts on food should come to an end.

The most recent cut brought the Tennessee tax on grocery bills down to 5.25 percent, and the plan is to cut it to a flat 5 percent by July 2013.

However, instead of taking a bite out of that rate even more, Lt. Gov. Ron Ramsey, R-Blountville, believes it's time to stop.

Ramsey said no one really notices the impact of small deductions on the food tax.

"I think the sales tax on food is a fair tax," Ramsey said. "It's a good thing, and everybody pays it."

Instead, he wants to target the Hall income tax, which is a tax leveled on interest on stocks and bonds.

The state gets $182 million from the tax, and Ramsey said lawmakers should change it so senior citizens don't have to pay.

"We encourage people to save for their retirement, but when you do, we tax you. That's just wrong," he said.

These tax cuts concern groups like Tennesseans for Fair Taxation, who worry about cutting any taxes without replacing the money.

But, they say if you're going to cut, the food tax is be the best place to start.

"It's better to continue reducing the food tax, because that affects so many more people and it affects the people that need it the most," said Dick Williams, with Tennesseans for Fair Taxation.

Another major tax issue expected to come up in the next legislative session is whether or not to pass a constitutional amendment banning a state income tax.

The issue is just one step away from appearing on the ballot in 2014 and could be one of the first votes lawmakers take when they come back in January.

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