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The Tennessee Legislature last month approved a quarter-of-a-percentage point cut in the state sales tax on grocery food, effective July 1. It was part of a package of tax cuts that included a phased elimination of the estate tax by 2016 and elimination of the gift tax.
In a newsletter wrapping up the 107th General Assembly emailed on Friday, May 18, state Senate Speaker Ron Ramsey said, "We gave every Tennessean tax relief by again reducing the food tax – reductions previous Democrat regimes refused to make."
By referring to "Democrat regimes," Ramsey was making a partisan statement that Republicans cut the sales tax on food and that Democrats had refused similar reductions in the past. But Ramsey – or his newsletter writer -- apparently has a short memory: the last reduction in Tennessee’s sales tax on grocery food was made in 2007 after it was proposed by legislative Democrats, who were still in the majority at the time, and signed into law by then-governor Phil Bredesen, a Democrat.
That cut in the state food tax from 6 to 5½ percent went into effect Jan. 1, 2008, when Ramsey was already speaker of the Senate. And it was double the food tax cut that Ramsey is now touting.
So, on its face, the claim flies in the face of basic facts, and a request for clarification to Ramsey’s office went unanswered.
But how about the credit Ramsey is taking?
Only last December, a cut on the sales tax on food was not on Ramsey’s wish list for the 2012 legislative session, and not only did he question the value of a cut on the sales tax on food, he also revealed that he had not been a proponent of the 2007 cut.
Ramsey hosted a press conference in his office on Dec. 15 to give reporters a preview of the upcoming legislative session. One question involved whether to cut the state sales tax on food, since Tennessee is one of only 11 states that still tax grocery food. He responded that since Tennessee has no income tax -- which he steadfastly opposes -- "you have to have a reliable source of income to provide the basic services … . And so the sales tax on food is that reliable source."
As for that 2007 cut, Ramsey said, "I’ll bet you that if you poll the citizenry, there isn’t 5 percent that can tell you that when you walk into a grocery store and you buy some pork and beans, your tax is 5.5 percent from the state and if you reach right beside it and get a box of toilet paper, it’s 7 percent. So I think it’s more psychological than it is anything else. We’re never going to do away with it completely so I don’t think that lowering it really does help that much and I think we could concentrate more on the taxes that we can actually eliminate."
A reporter asked: "But weren’t you a big proponent of cutting it back a few years ago?"
Ramsey replied: "Actually I wasn’t a big proponent to be perfectly honest. At that time, I tried to convince my caucus that the estate tax was the way to go. And we had a good discussion within our caucus on where we needed to go and I lost. And so I was always one at that time who thought we could take that same amount of money -- $45 million I think it was at that time – and use it for the estate tax as opposed to the sales tax on food and maybe I just didn’t fight hard enough at that time. So no, I was not a proponent at that time."
Going back further in time, to 2002, it was legislative Democrats who successfully argued for exempting grocery food from the one-cent sales tax increase that the state legislature approved that year to end a 3½-year battle over state tax reform. Up until that time, the state taxed all food at precisely the same rate as it taxed other goods subject to the sales tax.
Finally, last month when the budget was about to pass the legislature, House Democrats proposed to use increased revenue that is now flowing into the state to double the food tax cut that Haslam had proposed, cutting it to 5 percent rather than 5-¼ percent. But Republicans, including Ramsey, opposed the deeper food tax cut.
A release from Ron Ramsey claimed credit for getting the sales tax on food reduced by a quarter-cent and said Democrats in the past had "refused" such cuts.
But it was Democrats who were primarily responsible for keeping the sales tax on food lower than the overall sales tax in the 2002 budget deal, and it was in fact a Democratic legislature and governor who pushed through a half-cent tax cut in 2007. Ramsey also is on the record as not being a proponent of cutting the sales tax on food.
Ramsey may or may not be right about how closely Tennesseeans follow the taxes on their pork and beans and toilet paper, but he’s wildly misleading on the history of who has favored cutting the state sales tax on food and who has not. We rate this claim Pants On Fire.
Richard Locker, "Grocery tax cut goes to Bredesen" in The Commercial Appeal, June 12, 2007.
"Gov. signs $27.8B budget," in The Commercial Appeal, June 29, 2007.
Erik Schelzig, "Haslam: First Step in Cutting Inheritance Tax is a 'Big One'," from The Associated Press, Dec. 23, 2011.
Ron Ramsey press release: "Two years of unified Republican government."
Transcript of Dec. 15, 2011 press conference with Ramsey.
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