September 7, 2010

News Article

Sales Tax Increase Would Be Biggest Ever! (2010-01-14)

Missouri Senators heard from proponents and opponents of a proposal to impose the biggest sales tax increase ever attempted on the people of Missouri. The presentations, part of Senate President Pro-Tem Charlie Shields' series of educational seminars on key topics, were to an attentive groups of Senators and packed hearing room in the Capitol on Tuesday (1/12).

The proposal would relieve corporations in Missouri of any obligation to pay for the state services and infrastructure which make it possible for them to reap their profits in our state, by abolishing the state corporate income tax. It would vastly reduce the contributions wealthy individuals make to paying for state services by abolishing the state personal income tax, as well.

The $5 to $6 BILLION currently collected in state income tax would be replaced, in this proposal, by the largest state income tax ever attempted anywhere in the country. The current state sales tax brings in about $2 billion for general purposes, so you can see immediately the size and scope of the increase needed to produce an additional $5 to $6 billion.

Not only would this new sales tax rate be sky high -- probably 7% or more -- but it would apply to everything you purchase, including services not currently taxed, like medical bills, personal services (hair salons, for example), tuition, day care, nursing homes, and to things like prescription medications. Oh, and you would still have local sales tax, currently 4% or more in most cities, on top of the new state sales tax of 7%.

"This is a tax increase for 95% of Missourians," said Amy Blouin, Executive Director of the Missouri Budget Project, during her presentation in opposition to this proposal. "But a person with a million-dollar annual income would see an an average tax cut of over $22,000," Blouin said, citing analysis from the Institute on Taxation and Economic Policy.

You can view Blouin's PowerPoint slides that she used in her presentation and read the breakdown of the proposal that MBP prepared for allies, such as MASW, by linking here.