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Econ professor blames state legislature, credit card companies for high bankruptcy

September 16, 2003

Middle Tennessee has the dubious distinction of posting one of the highest bankruptcy rates in the nation, and the state's high sales tax, along with the proliferation of predatory lending practices, may be to blame, says Dr. Jerry Plummer, professor of economics.

"If I make $1,000 a week, and you may $100 a week, we're still going to pay the same 9.5 percent sales tax when we go to the grocery market," Plummer said in an article published in the Sept. 9 issue of The Leaf Chronicle. "That certainly puts a lot of burden on lower-income families."
September 16, 2003

Middle Tennessee has the dubious distinction of posting one of the highest bankruptcy rates in the nation, and the state's high sales tax, along with the proliferation of predatory lending practices, may be to blame, says Dr. Jerry Plummer, professor of economics.

"If I make $1,000 a week, and you may $100 a week, we're still going to pay the same 9.5 percent sales tax when we go to the grocery market," Plummer said in an article published in the Sept. 9 issue of The Leaf Chronicle. "That certainly puts a lot of burden on lower-income families."

Plummer says high-interest credit cards also are part of the problem. "Credit cards with an 18 to 20 percent interest fee can be obtained for free and with ease from credit card companies. They should be blamed to some degree for the current debt problem," he said.

High levels of credit card debt contributed to a record number of personal bankruptcies in the region: 15,226 personal bankruptcies were filed in Middle Tennessee alone.

Plummer says a law now under consideration would prevent those suffering from credit card debt from filing for bankruptcy. "If it passes, it's going to cause a lot of trouble for 'the little man.'"

Plummer's invitation from The Leaf Chronicle to address the topic of bankruptcy was the result of a "Local Angle" sent out by the Office of Public Relations and Marketing.
Meredith Dunn