September 10, 2009 -- For Immediate Release:

Contacts: Bill Howell, TFT Nashville staff: 615.289.1397
Samantha Maples, TFT Knoxville staff: 865.687.9600
John Stewart, TFT Board Chair: 865.806.8115
Dick Williams, TN Common Cause Chair: 615.934.5240
Tony Garr, TN Health Care Campaign: 615.430.8319

Income Tax Misrepresented in Health Care Debate

In a news release dated 7/17/2009, and in form letter replies to constituents who wrote him about health care reform, Sen. Lamar Alexander stated that the present proposal for health care reform would add $1.2 billion to Tennessee's budget in the future. He goes on to state that funding this expense would require a 10% state income tax.

“Senator Alexander is seriously misinformed on this issue and he’s only making responsible discussion of health care and tax modernization more difficult,” said John G. Stewart, Board Chair of Tennesseans for Fair Taxation.

A flat 10% income tax would raise more than $5.2 billion in Tennessee. That figure is based on information from the Tennessee General Assembly’s Fiscal Review Committee. In their fiscal note for SB 2054 - HB 2182 (pending legislation that includes an income tax, among other items) the Committee states that a graduated-rate income tax with a top marginal rate of 7.75% would raise $4.2 billion.

An additional 2.25% tax—the amount needed to reach the 10% level asserted by Senator Alexander—would raise more than an additional $1billion. In other words, even if Tennessee faced these additional health-related expenses, by no means a certainty, an income tax of less than 2%--not 10%--would be sufficient.

“Health care is far too important an issue for our elected representatives to be demagoguing about it. There are currently 4 different versions of health care reform legislation. Some keep all of the cost at the federal level. Some would require states to take some responsibility for the cost.” says Tony Garr, Director of the Tennessee Health Care Campaign.

“No health care is free. Everyone is paying for health care, but not in a rational way. The most efficient way is for everyone to get care in the right place, at the right time and in the right quantity. Forcing uninsured working people to go to the emergency room is not the right place, time or quantity. Ultimately health care reform will save Tennesseans hundreds of millions of dollars every year,” said Garr.

Bill Howell, Middle Tennessee organizer for Tennesseans for Fair Taxation reports, “I sent Sen. Alexander two emails challenging his income tax calculation and got back the same form letter both times.”

“With all the misleading ads, emails, viral videos and hysterical confrontations going on, we need our elected officials to be truth tellers.” said Dick Williams of TN Common Cause.

Bob Tuke, Democratic candidate for U. S. Senate in 2008, said, “When he was Governor of Tennessee, Sen. Alexander favored an income tax. Why is he now using fabricated income tax projections to spread fear and doubt about health care reform?” Stewart called on Alexander “to retract his misleading news release, issue a correction and send a corrected letter to all the constituents he misinformed.”