Wednesday night, I attended Governor Holden’s monthly Pizza and Politics event at Webster University, where Sen. Rob Mayer and MO State Budget Director Linda Luebbering were the guests. A reporter for The Beacon asked how high sales taxes would have to go if the Fair Tax were implemented. Sen. Mayer was surprisingly frank about it.
Here’s the meat of what Mayer had to say:
MAYER: There’s a lot of things that I have concerns about that, that ‘fair tax.’ And I probably shouldn’t be this frank and candid with you, but I can’t see us passing that ‘fair tax’ in this session. Now, I’m just one Senator and I probably shouldn’t make that kind of statement, but there’s a lot of details in that tax, in that proposal, that concern me. And you make a good, you ask a good question– how much does the sales tax have to be? You know, they talked about seven and a half percent or eight percent. But just, what, this last year, the realtors I guess, passed, wasn’t it some time of petition that would exclude them from that. And then, you know, then you start taxing attorneys and CPA services. And you know, then you get into this issue, well, certain ones want to be exempted out. And then everybody else wants to be exempted out. And before long, you’re talking about ten, twelve, thirteen percent. So, I mean, the concept intrigues me, but for me, there’s got be be a lot — I’ve got to have a lot of answers.
Bottom line: Not in the Senate, not this year anyway. And Luebbering’s assessment was even less favorable.
We actually did a fiscal analysis. I think, to the senator’s point, it’s a moving target because when some of the criticism comes back on ‘we’re gonna tax nursing homes’, they exempt nursing homes from the tax and we have a new version. And so it’s a moving target to try to figure out what the tax rate would actually be, based on the services that would be taxed. Based on the analysis we’ve seen, one of the versions would require a 14 percent tax rate with the average local taxes tacked on. We fondly refer to that rate as ‘Buy Kansas’ because people would go over the border to Kansas and buy things at that kind of tax rate.
But if this–should I dignify it by calling it an idea?–gets no traction in the Senate, that just shoves it down the road to an initiative petition. The question is, which version would Sinquefield pay to get on the ballot? Because whichever version he picks, the petition will face outrage–that we, of course, will fan. “What?! You’re not going to exempt nursing homes?” Or doctors? Or child care? Or auto repair? Or whatever.
St. Louisans will call it ‘Buy Illinois.’ Businesses in Kennett will call it ‘Buy Arkansas.’ Folks in Neosho will call it ‘Buy Oklahoma.’ And if/when an initiative petition is filed, we’ll come up with a catchier name for it. The fairly crazy tax? Is it too early in the meeting for the table to entertain other suggestions?