Tennessee voters to decide ban on income tax

By ERIK SCHELZIG, Associated Press

NASHVILLE, Tenn. (AP) — Tennesseans are just weeks away from voting on a constitutional amendment to bar lawmakers from ever imposing a state income tax. That vote approaches as a new study from ratings agency Standard & Poor’s suggests that rising income inequality has a stronger negative effect on the states most reliant on sales tax revenues compared with those with those more dependent on income taxes.

The S&P report that the affluent tend to save a greater share of their income and spend it on untaxed services, meaning that states are unlikely to see much of an increase in sales tax collections based on the gains among this group.

The last serious attempt to enact a state income tax in Tennessee occurred in 2002, but it failed amid raucous Capitol protests.

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