In a recent article, Forbes states that Tennessee’s tax structure has acted as a boon for jobs and economic growth in the Volunteer State. Tennessee’s approach “should serve as a lesson for the rest of the nation,” Forbes writes.
In the first ten months of this fiscal year, Tennessee has brought home nearly $800 million more revenue than state lawmakers initially budgeted. Forbes emphasizes the state has been able to generate this considerable surplus without an income tax.
As Forbes writes, this “$800 million payoff” — thanks to sound fiscal management — promises to further drive “Tennessee’s economic ascent,” which the magazine says “has been quite a few years in the making.”
“The ripple effect of this unexpected surplus is being felt throughout the economy. A new study by the Boyd Center for Business and Economic Research at the University of Tennessee-Knoxville shows that [Tennessee’s] economic growth is outpacing the national average, which should equate to a greater number of jobs as well as higher earning potential for Tennesseans,” Forbes writes.
While the absence of an income tax in Tennessee has spurred overall business activity, it has also attracted billions in new income as residents from other states, notably from high income tax states like California and Illinois, move to Tennessee, according to Forbes.
Forbes’ full article can be found here. In closing, Forbes articulates the advantages of doing business in Tennessee: “Once again, a state like Tennessee should serve as a lesson for the rest of the nation. Place a huge price on work, and you’ll see the type of loss and decline that plagues states like California and Illinois. Focus your tax revenue on predictable sources, such as sales tax, and see unprecedented growth that catches the attention of legislators, innovators, and rating agencies alike.”
