I was struck by something that Digby posted today on the DailyKos:

Voting isn’t just about making good things happen for yourself and your family.  It’s about voting against  things that will make your lives worse. And if this Republican party — at this point in history — wins big over the next two years, the lives of average Americans will definitely be worse.

No sooner had I read this than came face to face  I received an email that brought it home to me; I received a newsletter from my State Representative, the Boy Scout from GOP Hell, little Andy Koenig (who is, sadly, unopposed this year). His big news? He and his buddies  are going to try again with that GOP golden oldie, the “Fair” tax.  Their rationale:

When designing a tax structure we would never pick the system we have today. Taxes do damage to whatever you are taxing so we need to pick a system that does the least amount of damage. If you tax productivity you will have a society that is less productive. The tax that does the least amount of damage is a consumption tax.

The least amount of damage! Although, if  you’re wealthy and don’t mind being subsidized by the middle class and poor, perhaps you agree. Specifically, this soon to be revivified version of HJR 71, which was sponsored by Baby Andy last session, would do the following:

1. The individual income tax will be eliminated over 5 years.

2. Corporate income tax will be eliminated in 1 year.

3. The Corporate Franchise tax will be eliminated in 1 year.

4. The sales tax will be capped at 7% and be broadened in scope to keep the

rate low.

5. Service providers such as plumbing, painting, and lawyers, will have a sales tax.

6. Sales tax on used goods will be eliminated. (Used cars, used boats, used items)

7. Each Missourian will receive a prebate. (A prebate is an estimated return based on the money spent in sales tax to achieve $2,800 dollars in tax free spending per person or $11,200 for a family of four.

8. Exemptions will be made for business to business transactions, insurance (includes a reverse exemption), tuition for K-Higher Education, gasoline, and charitable donations.

Currently state sales taxes are 4.225%; this tax may be augmented by counties and cities so that total sales taxes in the city of St. Louis are 9.421%; in Franklin County, 7.975%; in St. Charles, 8.40%; etc. Will city and county taxes still be appended to the 7% sales tax proposed above or will they have to be adjusted to come in under the cap as HJR 71 specified? The effects could be unbelievably painful – particularly if, as seems quite likely, Rex Sinquefield’s gift to his wealthy cohorts, Proposition A, becomes law.

Certainly, although the plan Koenig lays out promises lots of goodies, he doesn’t deign to discuss revenue, which is probably all to the good since, from his supply side of the economic chasm, it would all be speculative fantasy. The Missouri Budget project estimated that had the prototype for this legislation, HJR 71, passed last session, in order to maintain the revenue stream, Missouri sales tax would have had to be raised to 11% and all services would have had to be taxed – a level of uniform taxation that, as that the Missouri Budget Project points out, no other state has enacted. Of course, since the folks who’ll get soaked under this proposal aren’t those who finance political careers, it may not be such a big deal for dear little Andy.

I’m guessing that the best solution according to our baby GOPer would likely be spending cuts – and we have all seen what GOP budget cutting mania has done to the state over the past year. There’s little left to cut without destroying the viability of the state – although, on second thought, that might be the goal – a little shock doctrine and Missouri could become very attractive for corporations who want to exploit the suffering to set up sweat-shops.

Koenig’s arguments for dragging this moribund idea into the light once again is the perennial chestnut that states without an income tax experience greater economic growth than those that tax income. This argument has been exploded time and again, but proponents of the fair tax keep dredging it up with only slight variations. Arguing against HJR 71 earlier this year, Amy Blouin of the Missouri Budget Project, offered detailed refutations of such claims, concluding that:

What the data do indicate is that there is no correlation between state individual and corporate income taxes and economic growth. State rates of economic growth and taxes vary considerably and there is no common pattern to make assumptions from. Many recent national studies back this up.

To bolster his arguments, Koenig does try to offer proof of his contentions; he cites a study issued by the conservative American Legislative Exchange Council, Rich States, Poor States, by Arthur B. Lafer (yes, that Lafer), Stephen Moore, and Jonathan Williams, a standard in supply-side circles, which attempts to correlate states’ economic competitiveness with income tax rates.

If you were to take a look at that study, you could not be blamed if you were to experience a sense of bemusement.  The relatively high position occupied by a state like Wyoming compared to New York’s low competitiveness ranking suggests that perhaps the authors bias their results by asking only part of the question that needs to be answered; income tax alone is not really the only determinant in play though this and similar studies operate from that assumption. As the political scientist and statistician, Andrew Gelman, notes apropos this study, “economic performance can be defined in different ways.” and, if one wishes to obtain a complete picture, definitely should be.

Such considerations, of course, seem to be beyond poor, ideologically driven Andy and many of his pals in Jefferson City (although to be fair, HJR 71 failed even the GOP smell test). Unfortunately, as I noted above, we can’t send Andy home this election, but we can try our best to make sure that he doesn’t have the back-up he would need to wreck this kind of havoc on the already ailing Missouri tax system. At the very least, with enough Democrats in office, we wouldn’t have to have this silly discussion over and over again.

I’m just waiting for him to go all in with a billion dollars:

CONTRIBUTION OF MORE THAN $5,000.00 RECEIVED BY ANY COMMITTEE FROM ANY SINGLE DONOR – TO BE FILED WITHIN 48 HOURS OF RECEIVING THE CONTRIBUTION

C101013 LET VOTERS DECIDE 10/22/2010

Rex A. Sinquefield

Westphalia, MO

Retired

10/20/2010

$500,000.00

They aren’t embarrassed by this at all, are they?

Nothing exceeds like excess.

Previously:

A billionaire thinks we’re all stoopid (October 20, 2010)

Let me count the ways Proposition A sucks. (October 13, 2010)

Campaign Finance: United for Missouri’s Priorities – opposing the billionaire on Proposition A (October 7, 2010)

What ten million dollars gets you (October 5, 2010)

The definition of obscenity (October 1, 2010)

Let’s tell you ’bout their best friends (June 23, 2010)

Lt. Gov. Peter Kinder (r): the base reaches out and opens up their wallets (June 22, 2010)

Even more millions here and even more millions there… (June 21, 2010)

A million here and a million there… (June 4, 2010)

Proposition A would forbid any municipality from ever enacting a local earnings tax, with the exception of St. Louis and Kansas City, which already have such a tax. But it would impose a restriction on the earnings taxes already in place, requiring that those two cities put the continuance of such a tax on the ballot every five years.

You have Rex Sinquefield to thank for this idea. Think of it as a practice run. If this one gets by the voters, then he’ll work to get his cancel-all-state-income-taxes/institute-a-mega-sales-tax idea on the 2012 ballot.

I’m grateful that at least this initiative isn’t a constitutional amendment. Beyond that, I have nothing good to say about it.

St. Louis gets a third of its income from the earnings tax and Kansas City gets 40 percent of its income that way. To replace those funds each city would have to either triple its sales tax or quadruple its property tax. Furthermore, such a crippling economic situation would destroy bond ratings in each city, thus imperiling any chance to borrow.

Considering this dire scenario, it’s maddening to think that the decision about the financial future of the economic engines of this state lies not in each city’s own hands, but with voters who have no immediate stake in the future of those municipalities. The rest of the state should butt out. Talk about Big Brother. Republicans are always frothing about ‘local control’–except when they’d rather not. Unfortunately, they’ve decided to abandon their local control mantra over as bad a notion as anyone could have dreamed up.

And by the way, St. Louis Mayor Francis Slay isn’t even fighting Prop A because he’s taken more than $245,000 from Sinquefield.

But. Do not despair. This is winnable for our side. For once, the rural areas are not pitting themselves against the urban areas. They’re not particularly fond of voting to deny themselves the right ever to vote on an issue. Kirksville, Springfield, and Columbia newspapers oppose Proposition A, as does the Municipal League, which represents Missouri cities, towns, and villages.

Now if you’d like to help the effort to hand Rex a failure, you could help with phone banking or canvassing. We need to bring his momentum to a screeching halt.

Here’s the contact info: Sign up to volunteer on the Say No to A website; or if you’re in St. Louis, call Aaron at Jobs with Justice: 314-644-0466.

There’s been a bit more campaign finance news about Proposition A – the ballot initiative battle over earnings taxes in Kansas City and St. Louis.

From the United for Missouri’s Priorities web site:

The Facts About The Statewide Ballot Initiative To Repeal The Earnings Tax

This Initiative Will Hurt Missouri

Missouri’s best is still ahead of us, but we’ll never get there if we don’t have safe neighborhoods, good schools, stable jobs, and basic services. This initiative will force hundreds of millions of dollars in cuts to the budgets of Missouri’s two largest cities with no plan to replace funding. This will devastate their ability to provide basic services and will make those communities less safe and less livable and will make our state a far less desirable place for families to move and businesses to locate and bring jobs…

The billionaire and two other folks who want to eliminate the earnings taxes have a head start:

What ten million dollars gets you (October 5, 2010)

Their opponents, who want folks to defeat Proposition A and preserve the financial well-being of Missouri’s two largest cities, have raised some money in the last day or so, as reported at the Missouri Ethics Commission::

CONTRIBUTION OF MORE THAN $5,000.00 RECEIVED BY ANY COMMITTEE FROM ANY SINGLE DONOR – TO BE FILED WITHIN 48 HOURS OF RECEIVING THE CONTRIBUTION

C101545 UNITED FOR MISSOURI’S PRIORITIES [pdf] 10/7/2010

National Education Association

Washington DC

10/6/2010

$200,000.00

Missouri Federation of Teachers

SRP Solidarity Fund

Jefferson City MO

10/7/2010

$55,000.00

[emphasis added]

CONTRIBUTION OF MORE THAN $5,000.00 RECEIVED BY ANY COMMITTEE FROM ANY SINGLE DONOR – TO BE FILED WITHIN 48 HOURS OF RECEIVING THE CONTRIBUTION

C101545 UNITED FOR MISSOURI’S PRIORITIES [pdf] 10/7/2010

Ballot Initiative Group of Missouri Inc

St Louis MO

10/7/2010

$10,000.00

Change To Win

St Louis MO

10/7/2010

$15,000.00

[emphasis added]

That’s chump change when compared to over ten million dollars from one person. Or, plutocracy, whichever you prefer.

And, the national corporation advertising mascot of compact low voltage energy source storage devices leporidae check writer for right wingnut causes (apparently, with a short attention span, too) keeps on giving:

CONTRIBUTION OF MORE THAN $5,000.00 RECEIVED BY ANY COMMITTEE FROM ANY SINGLE DONOR – TO BE FILED WITHIN 48 HOURS OF RECEIVING THE CONTRIBUTION

C101046 MISSOURI CLUB FOR GROWTH POLITICAL ACTION COMMITTEE 10/7/2010

Rex Sinquefield

Westphalia, MO

Self-Employed

10/6/2010

$125,000.00

[emphasis added]

Heh. Plutocracy, indeed.

Let’s tell you ’bout their best friends (June 23, 2010)

…Six degrees of republican interest groups? With friends like that, who needs to go door to door?

Because of the environment post Citizens United v. Federal Election Commission [pdf], it ain’t a Democracy, it’s a plutocracy. And Rex Sinquefield appears determined to prove that.

Yesterday we spotted this Internets ad on a progressive web site. We kid you not.

“…on local earnings taxes…” Really? So this is a local issue? Then why would a billionaire spend millions to get it on a statewide ballot? Just asking. We should label this as some form of cognitive dissonance, at least on the part of the bankroller and the right wingnut initiative industrial complex. And for the latter that would include being recipients of wingnut welfare.

From the Turner Report:

Friday, October 01, 2010

Sinquefield contributes $3.9 million to Let Voters Decide

Let Voters Decide appears to be a somewhat misleading name.

Considering that he has already poured more than $10.6 million into the earnings tax issue, it appears retired billionaire Rex Sinquefield is planning to make the decision on his own.

Sinquefield passed the $10 million mark today when he contributed $3.9 million, which looks to be the largest amount donated in one chunk to any Missouri candidate or cause, according to Missouri Ethics Commission documents. Let Voters Decide, a Sinquefield initiative is pushing for repeal of earnings taxes in St. Louis and Kansas City.

[emphasis added]

The effect of proposition A on Kansas City and St. Louis – from Amy Blouin of the non-profit Missouri Budget Project:

Proposition A could harm all Missourians

….Proposition A threatens to eliminate as much as 32 percent of St. Louis’ general revenue and 38 percent of Kansas City’s. To put it in perspective, that would be almost the exact amount each city spends on its police department.

The options for replacing that missing revenue are limited. Cities would be forced to choose between eliminating services, instituting fees on everything from fire and police protection to charging for admission to cultural attractions like museums and the zoo, or would have to significantly increase their local sales taxes, property taxes or both. None of these are great options, particularly during an economic recession.

St. Louis, for example, would have to more than triple its current local general revenue sales tax rate, increasing the rate from 1.375 percent to 5.3 percent. This amount would be in addition to dedicated local sales taxes and the state sales tax rate, increasing St. Louis’ effective state and local sales tax to as much as 12.201 percent.

In Kansas City, the current local sales tax rate of 2.375 percent is already dedicated to specific funding needs. To provide funding needed to replace the earnings tax, Kansas City would need to more than double that rate to 5.4 percent. Added to the state rate and the Jackson County levy, Kansas City’s state and local sales tax rate would become 10.75 percent.

But this size of increase could act to significantly deter shopping within the cities. As some shoppers may seek to avoid the higher sales tax rate, not only would local business be harmed, but state and local tax revenue would be affected as well. Both cities could instead enhance the local property tax rates. However, property tax would need to increase nearly 400 percent to fill the gap….

You don’t hear that from the ads run by Let Voters a Billionaire Decide, do you?

Previously:

The definition of obscenity (October 1, 2010)

Let’s tell you ’bout their best friends (June 23, 2010)

Lt. Gov. Peter Kinder (r): the base reaches out and opens up their wallets (June 22, 2010)

Even more millions here and even more millions there… (June 21, 2010)

A million here and a million there… (June 4, 2010)

I voted FOR the casinos’ Prop A Amendment last fall, knowing I was about to get snookered. No matter what the casinos claimed, I knew that the additional tax money it raised would never go to education. Didn’t you? Because if you didn’t, you’re a fool. Look at the history: the casinos made the same promise in 1992, and then the legislature played a shell game with the money. I voted against it back then, and with history as my teacher, I … did an about face?

Yes, and it galled me to help them make a fool out of me, but I’d seen the forecasts of what was about to happen to Missouri state revenues. We were going to need every penny we could get from whatever source, especially since Republicans hold the purse strings.

In her latest newsletter, Representative Jeanne Kirkton–D-Webster Groves–confirmed my expectation about what would happen to the funds:

A shell game is being played with the Proposition A casino revenue approved by voters in November 2008. Once again, voters were promised the money would be additional revenue for public schools but instead it is being used to replace $108 million in general revenue for other, non-education purposes.  There is no new money for education or increased state funding for our schools from Prop A funds.

Oh well. Considering the fiscal lunacy of the current majority party, I can’t regret voting for that damned Prop A amendment. A hundred million is a hundred million, even if it’s going to pay to keep state agencies staffed, or whatever they’re using it for, instead of reducing class sizes.

The Republican lunacy I refer to includes bringing up again in the House a TABOR-like amendment–and this time passing it (82-78). Let us hope that cooler heads prevail in the Senate and that we are not forced to vote down this constitutional amendment in 2010, because it is a dangerous idea.  The amendment would limit future state spending to what it is now, plus inflation and population growth. How sane is it to try to limit all future spending to the level we suffer during a year of severe recession–perhaps one even headed toward a depression? At a time when our state revenues are being sucked into a pit of quicksand, the wingnuts would like to plant a heavy fist on the budget and push it deeper into the mire. I suppose it would be rude to use the word “crackpots” at this juncture, wouldn’t it?

To the Republican way of thinking, though, this is the ideal time to get such a constitutional amendment on the ballot . They relish–a la Grover Norquist and bathtubs–a chance to slash welfare for all those shiftless poor people. And keep it gone.

They have a bonny fine start on that goal: Regular readers of this site know they’re turning down an abso-freakin’-lutely free hundred million dollars for Medicaid.

And that bit of vengeance on people for the sin of being poor almost pales in the face of turning away hundreds of millions in stimulus money.  The $4.3 billion in federal recovery funds that Missouri is slated to get is divided into two categories: funds for new projects to rev up the economy and funds to prevent budget cuts, that is, to keep the state’s economy from spiraling downward. Republicans are fine with spending the first kind of funds for one time projects like highway improvements. They’re not fine with preventing state budget cuts.

They pretend that their revulsion with those funds is a principled stand against overspending. But their ethical code is selective. They’ll take the $500 million for education funding, thank you very much, but they’re thumbing their noses at federal dollars for senior services, mental health services, and children’s health care.

Mind you, I’m not complaining that Republicans took the education funds. We need them, so it’s fortunate that the right wingers are savvy enough to realize that cutting education spending would incense even the voters who don’t mind seeing poor children go without health care. All I’m saying is: stinginess and callousness do not a code of ethics make.  Especially when refusing to take those funds means that health care jobs get cut and that our already reeling state economy will take another hit as a result.

Anyway, the voters of Missouri got flim-flammed again into voting the way casinos wanted them to last fall. Thank goodness for small favors.

Following up on Randy’s point about casinos spending millions on behalf of a proposition that will supposedly help schools, while educators do not, let’s look at the other half of the equation. Part of the argument is that Proposition A really isn’t in the casinos self-interest, since the proposition will increase taxes on casinos and prevent the further spread of casinos in Missouri. I’m somehow skeptical that casinos would spend $8 million for something not especially in their interest. Maybe I’m just too cynical.

Anne Marie Moy did a brave thing last Monday: she walked into the Democrats’ den to speak in favor of the Yes for Schools First ballot measure (Proposition A). She tried to convince members of the West County Dems, many of whom are retired teachers, that they should vote for Prop A, which would repeal the loss limits imposed by Missouri voters, restrict the number of casinos to those already built or being built, and increase the casino tax by one percent. Since repealing the loss limit would, according to her, increase school funding in Missouri by more than $100 million, you’d think the audience would have been applauding; instead, they were underwhelmed.

Ms. Moy argued that the loss limits Missouri imposed when it legalized gambling in 1992 have been ineffective at controlling problem gambling, ineffective at anything except driving customers away from Missouri casinos. Not only do gamblers dislike the loss limit system, they really dislike the long lines that result from checking on whether they’ve exceeded the limit. Moy asserted that our casinos lose 30 percent of otherwise would-be visitors to casinos in other states because of the loss limit. She further asserted that Iowa repealed its loss limit law and that studies showed no increase in problem gambling in that state.

Discouraging people from doing their gambling in Missouri translates into lost revenue for our state and our schools, she said. Right now, the state gets about $780 million a year in revenue from casinos, and $300 million of that goes to school funding. But the casinos are facing increasingly stiff competition from other states. In 1992, only two nearby states had casinos, one in each state. Now we’re surrounded by states with casinos, and Kansas City, KS is slated to bring four new casinos online soon.    

Moy said several times that repealing the loss limits would increase school funding by more than $100 million dollars, and she assured us that the funds would be subject to the “ultimate safeguard” of requiring an annual audit by the state auditor to assure that the funds were being used as intended.

When the Q & A session started, though, the first question got right to the heart of the objections many audience members had: “What guarantee is there that the additional money that comes in will not be reduced by a similar amount from the regular general revenue budget?” That was the voice of experience. I remember thinking in 1992, when I was still teaching, that if we legalized gambling, the legislature would just do a double shuffle with funds and schools would be no better off. That’s exactly what happened.

Moy’s response:

“We’ve written our measure to make it tamper proof. There are several layers of protection written into the measure to ensure that all of the funds generated by Proposition A will go into, first, a special fund called the “Schools First, Elementary and Secondary Education Fund” so we can easily track it and see where it’s going. … If it weren’t for that special fund, it would make it easier for the money to be losst in the shuffle or in some Jefferson City shell game. But by directing it to this fund, we can see where it’s going, we can track it, and if any legislator would want to attempt to do something improper with that money, they’d have to do it in the light of day. We would be able to see it and track it and call them on it.”

I could almost see the audience thinking: “Umm-hmm. Fool me once, shame on you. Fool me twice, shame on me.” And the woman sitting next to me said, “What? Fiddle with the will of the voters? You mean like they did when they overrode the conceal/carry legislation? Oh no, surely they’d never!”

Casinos have sunk more than three and half million dollars into passing Prop A, and another audience member, noting that taxing casinos is just another regressive way to take the burden off the wealthy and shift it to more vulnerable members of society, asked Ms. Moy who paid her salary. She had to admit that the casinos employ her. “I rest my case,” he said.

And a strong case it is.

But consider: if loss limits are kept, not only would we not get the $105-130 million for schools, but our casinos would continue to bleed and we’d get perhaps $45 million less than we’re used to. I guess we have to ask ourselves whether, in a state where a truly progressive income tax is about as likely any time soon as the Second Coming, is it wise to forfeit, say, $150 million a year for our schools?