Last year’s attempt in the Missouri lege to put a constitutional amendment on the ballot dumping the income tax in favor of a bigger sales tax went nowhere. But like a vampire yearning to suck the economic blood out of Missourians, it’s back again this year. And stronger. It got an early hearing in the state Senate on Wednesday.
It is a genuinely crappy idea.
In case you could use a refresher course on what’s wrong with it, here’s what I wrote last year:
Astroturf organizers are pushing the “fair tax”. The term is one of those “exactly the opposite of what it really means” phrases, like Bush’s Clear Skies initiative that actually weakened parts of the Clean Air Act. The Fair Tax, being pushed at both the national and the Missouri level, proposes replacing the income tax with a larger sales tax.
And it’s fair all right, in fact, more than fair–to the wealthy. Under the bill that was proposed in the last state legislative session (HJR 36), those making a million dollars or more a year would, according to estimates by the Missouri Budget Project, pay about $22,000 less in taxes a year. But 95 percent of us would pay more, especially those in the middle. Those making around $37,000 a year would pay about $2,000 more in taxes.
So you’ll find various organizations, the same ones in general who astroturfed the last round of Tea Parties, pushing the fallacious notion that we could eliminate the state income tax, raise the state sales tax from 3 percent to 5.11 percent, and fund all the same programs. But Missouri Budget Project figures that the sales tax would have to be closer to 10 percent to generate the same revenue, and that the 10 percent tax would be levied on virtually everything. You’d pay sales tax to the plumber, sales tax on medicine, sales tax on day care, sales tax on rent, sales tax on groceries, sales tax on auto repairs, sales tax on nursing homes and funerals and doctor’s visits. Hell, sales tax on smiles and handshakes.
So the hearing Wednesday of the Senate Government Accountability and Fiscal Oversight Committee attracted a wide variety of witnesses opposed to the idea. In a press release about the hearing, Missouri Budget Project (MBP) highlighted three pieces of testimony.
As part of his submitted testimony, Ron Leone, Executive Director of the Missouri Petroleum Marketers Association said, “SJR 29 doubles the motor fuel tax and we have grave concerns that it puts us at a competitive disadvantage with our border states.”
Jeremy LaFaver, Director of Public Policy for Partnership for Children, also testified at the hearing and spoke about the potential impact on Missouri families who have children, including increased costs for child care and private k-12 school tuition – both of which would be taxed under this proposal.
And Ron Sergent with AARP Missouri noted in his submitted testimony that, “Families with fixed incomes, like Missouri Seniors, would have their monthly costs increase by as much as 11 percent…while tax discounts would be decreased or eliminated. For example, the proposal would eliminate all tax credits, including the Senior Citizen Circuit Breaker, which seniors and people with disabilities currently receive to offset some of their local property tax.”
Amy Blouin, executive director of MBP, pointed out that in these hard times, last year’s estimate that a 10 percent sales tax would be needed is too low. Now it would take 11 percent. And we’re not talking about more money for roads or teachers or bridge repair with that 11 percent. Uh-uh. No, that would only fund the bare bones budget that keeps Missouri near the bottom of the fifty state pack. Furthermore, Blouin says: “No other state taxes services as broadly as Missouri would under this plan. There simply is no comparison for Missouri to use to assess this proposal. It is untested.”
To sum up: Republicans are proposing a 5 1/2 percent sales tax that would come nowhere near funding even our spartan state services. True to form, the right wing legislature has found a way to exacerbate Missouri’s problems rather than address its needs.