Dec. 22, 2008 - For immediate release...

Primary Contacts:

• John Stewart, Board Chair, 865-584-3834 (h) or 865-806-8115 (cell)
• Ron Naylor, Board Member, 423-451-0074 (h) or 423-280-1801 (cell)

Other members available for interviews statewide. Contact Brian Miller at 865-712-8006 to arrange interviews.

New Video Focuses on Food for the Holidays

With a one billion dollar shortfall in the state budget and an economy in crisis, the impact of Tennessee's high food tax is getting increased attention. With the third highest food tax in the nation, the State of Tennessee takes a full 28 days worth of groceries from each family every year according to a new video released on YouTube by Tennesseans for Fair Taxation (TFT). "That's enough food to last from Thanksgiving to Christmas, or alternately, for the entire month of February," states Ron Naylor of TFT.

"Let's face it, Tennesseans, like many in the nation, are facing hard times right now," adds Naylor, "Having to give up a full month's worth of groceries on top of high gas prices, home foreclosures, and job losses is a terrible additional burden." Thirty-six states do not tax food at the state level, including South Carolina, which eliminated its food tax last year.

The newly-released video also points out the impact that Tennessee's high sales tax has on state revenues and local jobs by driving shoppers over state lines into places like Kentucky, which has a lower general sales tax and zero tax on grocery food.

"While adequate funding for education, environmental protection, health care, and other public structures is vital, there are far better ways to fund those services than taking a month's worth of groceries from families working to make ends meet," states TFT's State Chair, John G. Stewart.

TFT is supporting a package of initiatives that can help pay for further reductions in the state food tax, while also raising funds to meet the current budget shortfall. One element of the package is a plan to close a series of corporate tax loopholes by enacting "combined reporting" as 22 states already use. The plan also includes a reduction in the state food tax from 5.5% to 4.5% (local governments can add another 2.75% to the state rate). The remaining revenue, estimated to be as much as $100 million, would be used to alleviate some of the proposed budget cuts.

TFT is also continuing to push for a comprehensive tax modernization plan that will fully repeal the state and local food tax, reduce the sales tax on non-food items, and enact a broad-based state income tax with generous exemptions that will replace the current state income tax, which is limited to certain types of investment income. The new plan being developed by TFT also raises one billion dollars in new revenue while lowering taxes for 60 to 80% of Tennesseans, primarily low- and middle-income taxpayers.

"Tennessee's existing tax structure was designed in another century and cannot support 21st Century challenges," states Stewart. “Our current tax system is an antiquated disaster. It's driving shoppers and tax dollars into neighboring states, building their economies, not ours. It's taking an unfair share from working families trying to get ahead. It can't even keep up with economic growth in Tennessee, resulting in shortfalls in both good and bad years."

"The billion dollar shortfall this year should motivate legislators to enact a tax modernization plan that will lessen proposed budget cuts and also reduce the high food tax," concludes Stewart. "We can do both, but it will take courage and a willingness to embrace real change."

The new YouTube video can be viewed at www.fairtaxation.org or at www.youtube.com/taxfairness

# # #