Updated on Feb. 23 at 1:03 p.m.:
A Missouri House Committee voted along party lines to advance the so-called "Fair Tax" proposal for the 2012 statewide ballott.
The proposal would eliminate Missouri's income taxes and replace them with a higher sales tax.
Republicans voted for the proposal while Democrats opposed it, but committee Chairman Doug Funderburk, of St. Charles, acknowledged that he and other Republicans still have concerns about the financial impact of the proposal.
The bill would phase out Missouri's income tax by Jan. 2019 and replace it with a higher state-wide sales tax for goods and services. It requires a statewide vote.
If the bill goes onto the statewide ballot, how would you vote? Do you support a higher sales tax over a state income tax?
Original story:
Some of Missouri’s top political players are opposed on the issue of whether the state should switch from an income tax to an expanded sales tax.
The Missouri House Democratic Leader Mike Talboy is openly questioning Tom Schweich, the state auditor, saying Schweich should make another attempt at developing a cost estimate for the sales tax.
Last week, the auditor claimed that he was unable to come up with an accurate figure to properly inform consumers about the tax proposals because it would be assuming too much.
Schweich says two big unknowns that keep him from writing up an estimate. One is that it is unknown how consumers will react to the change. The other is that the decisions made by lawmakers that would be crucial to the outcome and those cannot be predicted.
Talboy, a Kansas City representative, says its “puzzling” that Schweich couldn’t come up with a number and is urging him to try again.
Schweich responded, saying an objective auditor can’t put together an estimate and that Talboy’s remarks are politically motivated.
Other politicians are getting in on the debate as well. According to yahoo news, Governor Jay Nixon agrees with Schweich on the issue. He says the sales tax is a bad idea and not the right thing to do. He added that the “fair tax” would add a tax to some things that have not been taxed in the past.
That fact could affect border cities such as St. Louis and Kansas City the most. In those areas, consumers could go into Kansas or Illinois to make their purchase without the Missouri sales tax.
The news website Bloomberg reports that Missouri House Speaker Pro Tem Shane Schoeller is on the other side of the fence. He thinks that the new tax system would draw employers into the state.
The Missouri Department of Revenue’s website says the state’s sales tax currently sits at 4.225%, being split between general revenue, conservation, education, and parks/soils.
Many of the proposed tax plans want voters to approve a 7% sales tax, but experts say that could leave the state with a budget shortfall of up to $1 billion. They say to avoid that shortfall a minimum of 8.1% would be needed.
If Missouri does switch to a sales tax system, it will be the 10th state to do so.
Let us know what you think. Do you think the switch would be a good idea or should we stay with the income tax?
(The Associated Press contributed to this story)
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