Fall election - Memphis payroll tax proposal

[BrandonTO416]

http://www.wmctv.com/Global/story.asp?S=2452350&nav=4XzRSArO

Payroll tax questions from Mid-South voters

People who've already voted say they were confused about the ordinance calling for a payroll tax in Memphis. The tax would be applied to everyone who works in the city. Some voters say the question on the ballot is too wordy and says nothing about a payroll tax. Audrey Joffrey is a retired school teacher and accountant. Joffrey says she is in favor of a payroll tax and that's what she thought she would be voting for, until she read the question on the ballot. Steve Mulroy, U of M Law Professor said, "Just reading it as a lawyer, I don't see any hidden agenda except to just cover themselves. So that whatever they decide to do, that's like a payroll tax, however they decide to do it. It will be covered by this very broad language."

Attorney Alan Wade drafted the ordinance. Wade says it was not meant to be confusing, just precise enough to give the city council parameters to write a payroll tax or privilege tax ordinance. Wade says the ordinance, if passed, will allow city council to decide which vocations or occupations it will tax.

The referendum reads: "The Council of the City of Memphis is authorized by Ordinance to authorize the City of Memphis to levy and collect an additional privilege tax and /or fee on the privilege of engaging in certain vocations, occupations, callings and employment related activities within the City and to authorize the use of revenue derived therefrom for budget expenditures for fire, police and for corresponding reductions of ad valorem taxes for expenditures made from such revenues."

Voters will be asked to vote For or Against the referendum. A vote FOR means you favor a citywide payroll tax for everyone who works inside the city of Memphis. A vote AGAINST means you are against a citywide payroll tax.

[BrandonTO416]

So you guys know, Tennessee has no state level income tax, we rely on high sales taxes that vary from 9.25-9.75%, and 8.25-8.75% food/grocery tax statewide depending on the county. Due to this, local governments have to raise taxes more then other states in the region.

I'm not supportive of a local government wage tax, so I hope this does not pass. The city of Memphis would be highly uncompetitive over its suburbs. I would rather Tennessee pass a statewide income tax. This surely would kill the city of Memphis to have a local level income tax and kill urban growth.

[Brickell]

That's the first thought I had. Way to encourage sprawl Mephis.

This should definitely be a regional if not state issue.

[sleepy]

Yet the fastest growing county in the Memphis metro--DeSoto County, MS--has a state income tax. I'm not really sure how much taxes influence where a person lives.

[BrandonTO416]

But, people working in DeSoto County that work in Memphis don't have to pay income taxes, because they work in Tennessee. And shopping on the Mississippi side is far cheaper because the sales taxes are 7% instead of the 9.25% in Shelby County/Memphis, and in Mississippi there are no food/grocery taxes like there are here.

So there is a slight competitive advantage of living in DeSoto right now, even though DeSoto isn't growing anymore then Eastern Shelby suburbs.

What is sad is that suburban Memphis' DeSoto County, Mississippi is MS's fastest growing county. Mississippi is quite possibly the most depressed state in the southeast considering its fastest growing county is suburban overflow from a Tennessee city.

At least Northwest Arkansas is growing and Little Rock holds its own, otherwise Arkansas would rank right beside Mississippi.

[Cotuit]

There's a grocery tax? Does it cover all groceries? Up here we have a meals tax which is charged on prepared food (basically anything someone makes that you would be expected to eat in one serving). In Maine they also have a junk food tax, it taxes single serving items, so a small bag of chips would be taxed, a large bag not. Generally food is seen as a necessity that people shouldn't be taxed for. It goes back to the whole tea party thing.

[MathNerd05]

Memphis is already uncompetitive with its suburbs. The last figures I saw stated the city of Memphis had around 130,000 inhabitants while the surrounding metro area had 897,000 residents.

Not to rant, but here is a fun story for everyone:

When I was being forced to go to college, I had three options: The University of Memphis, The University of Tennessee at Knoxville, or The University of Mississippi. Ole Miss is far smaller than Memphis or UT and is out of state, yet it costs me almost twice as much to go to in-state schools as it did Ole Miss (excluding any scholarships.) Why? Incompetant taxation. The reasons given above for why Desoto County and Eastern Shelby County are the fastest growing areas are true. As a student in Oxford, MS (about an hour south of Memphis) I would much rather go to the mall and movies in Tupelo MS than in Memphis. Why? Sales taxes.

As a previous resident of Memphis, I believe it is one of the most backwards cities in the nation. (And Mayor Willie Herrinton is no better.)

[Allan]

A grocery tax? In Michigan we don't get taxed on any food items.

[Spartan]

In SC, food is taxed, but its just a part of the general 5% sales tax, not its own category. That tax plan for Memphis is horirble. But I think that most voters would not vote to create a new tax on themselves. It does say that sales taxes would be reduced, so maybe that would encourge visitors to spend more? Doesn't seem like enough of a counterbalance to me.

[sleepy]

But, people working in DeSoto County that work in Memphis don't have to pay income taxes, because they work in Tennessee. And shopping on the Mississippi side is far cheaper because the sales taxes are 7% instead of the 9.25% in Shelby County/Memphis, and in Mississippi there are no food/grocery taxes like there are here.

So there is a slight competitive advantage of living in DeSoto right now, even though DeSoto isn't growing anymore then Eastern Shelby suburbs.

What is sad is that suburban Memphis' DeSoto County, Mississippi is MS's fastest growing county. Mississippi is quite possibly the most depressed state in the southeast considering its fastest growing county is suburban overflow from a Tennessee city.

At least Northwest Arkansas is growing and Little Rock holds its own, otherwise Arkansas would rank right beside Mississippi.

<{POST_SNAPBACK}>

DeSoto County residents certainly do pay Mississippi state income tax on income earned out of Mississippi. But the residents say it is offset by lower property taxes. And groceries in Mississippi are not exempt from its sales tax, only prescription drugs.

DeSoto is not just fast-growing for Mississippi, it's in the top 50 nationally, and the fastest growing in the southeast outside of some counties around Atlanta and in Florida.

[sleepy]

Memphis is already uncompetitive with its suburbs. The last figures I saw stated the city of Memphis had around 130,000 inhabitants while the surrounding metro area had 897,000 residents.

Not to rant, but here is a fun story for everyone:

When I was being forced to go to college, I had three options: The University of Memphis, The University of Tennessee at Knoxville, or The University of Mississippi. Ole Miss is far smaller than Memphis or UT and is out of state, yet it costs me almost twice as much to go to in-state schools as it did Ole Miss (excluding any scholarships.) Why? Incompetant taxation. The reasons given above for why Desoto County and Eastern Shelby County are the fastest growing areas are true. As a student in Oxford, MS (about an hour south of Memphis) I would much rather go to the mall and movies in Tupelo MS than in Memphis. Why? Sales taxes.

As a previous resident of Memphis, I believe it is one of the most backwards cities in the nation. (And Mayor Willie Herrinton is no better.)

<{POST_SNAPBACK}>

Actually, your numbers are wildly off.

The population of Memphis is about 650,000. The population of Shelby County is 897,000. The msa population is about 1,230,000.

And while Memphis has next to nothing to do with setting statewide tuition charges for the state of Tennessee, your tuition figures are also off, after checking:

The University of Memphis charges $5400 per year for instate students.

Ole Miss charges $8700 per year for out of state students.

Sounds like you were the victim of a scam. It should be noted too that the University of Memphis also has a more selective admissions policy than Ole Miss.

[Brickell]

http://www.taxadmin.org/fta/rate/sales.html

State tax rates - interesting read

I could of swore that we have sales tax on food here. I thought only certain "needed" items such as milk, water, bread, etc were exempt, but according to the list food is not taxed. Prepared food definitely is.

[BrandonTO416]

I went to the University of Memphis and I don't see how it could be more expensive then out-of-state Ole Miss. You must be off there.

And I'm not sure how you can say you enjoy Tupelo more then Memphis, but hey. To each his own.

[sleepy]

I think most people in the Memphis metro move to DeSoto County for two reasons:

1. Even though taxes may overall be roughly the same given MS's income tax, they feel that Memphis-Shelby County is a corrupt, big-spending government, even though Memphis is rated in the top 10 for govt. efficiency. Frankly, I think it's because Memphis-Shelby is viewed as a black-dominated, corrupt, big city.

2. Eastern Shelby County is as expensive and affluent as Williamson County, TN. If you want suburbia and aren't fairly well-off, DeSoto is the only reasonable option.

[BrandonTO416]

The fact is DeSoto County is where suburban whites flee to because they feel uncomfortable with the black ran government of the city and increasingly in the county government.

The whites that are more secure and don't feel threatened stay in Shelby County.

Kind of sad in a way. There really aren't advantages to living in DeSoto County. You can buy homes in the north Shelby area that are just as nice as DeSoto homes and don't cost anymore. Its not upscale like Germantown.

Really it boils down to government incentive, developers, and marketing. Sleepy, being that I visit Memphis every few months and lived there from summer 2001-spring 2002 I got to hear many advertisements. If you listen to Memphis radio, developers are quite strong about moving people to DeSoto county. You hear the "good schools, safe neighborhoods, low taxes" argument over and over. It seeps in and people buy out there because of it.

If we could get more marketing of 240 area redevelopments, I bet you'd see more people interested in buying new homes within Shelby and even in the city of Memphis.