No Idea is Too Stupid to Voice in Jefferson City - or to Win a Republican Majority
Missouri State Representative Ed Emery (R-Lamar) has proposed totally eliminating the state income, franchise and corporate taxes, and shifting the cost of government disproportionately onto the backs of the mid-Missouri poor through an increased sales tax. This may be the single dumbest thought voiced out loud in Jefferson City in the past quarter century, but it still passed the House on a voice vote.
Just think for half a second, and the flaws of this approach will occur to any but the most slow thinkers. The sales tax is a regressive tax, and Emery's idea would tax the poor at a far higher rate than the wealthy. It would eliminate virtually all retail business within an hour's drive from the border, and create boomtowns in our 8 surrounding states. The only positive economic impact would exist only in far-fetched "trickle-down" fantasies, in which corporate CEOs would somehow lower prices rather than simply use their tax boon to finance a new house on the border of Johnson County.
In reality, this thing has zero chance of passing, and only a few of the truly dense people in Jefferson City really think that such a radical, economically disruptive, and anti-working poor proposal is a good idea. But irresponsible Republicans moved it forward because now they can claim on the stump that they voted to eliminate the income tax, and they will draw a hearty cheer from the ill-informed.
In a better world, with better leadership, such a proposal would never see the light of day. In a more dignified time, Emery would feel ashamed of himself for making such a poorly-thought-out proposal, and his Republican colleagues would be embarrassed for him. Instead, we see a majority of his colleagues voting in favor just so they can have a cheap throw-away line in a campaign speech.
We deserve better than crackpot ideas embraced by opportunists.
Labels: Missouri, republicans, tax policy
posted by Dan at 4/21/2009 06:33:00 AM
9 Comments:
I've read some pretty stupid, unfounded claims in my time, but Dan; just how ignorant do you think your readers are?
"It would eliminate virtually all retail business within an hour's drive from the border, and create boomtowns in our 8 surrounding states." -Really? Please explain to all of us how a 1% sales tax increase will cause shoppers to find a need to avoid Missouri.
According to the Federation of Tax Administrators, as of January 2008, the sales tax in Missouri was 4.225%. Let's compare that to our surrounding states:
Arkansas 6%
Kansas 5.3%
Iowa 5%
Illinois 6.25%
Kentucky 6%
Tennessee 7%
Nebraska 5.5%
Oklahoma 4.5%
With 3/4 of our surrounding states already having a state sales tax more than one percentage point above ours; how can you support your claim?
It's easy to see why you didn't post any numbers to support your claim.
How many illegals are paying no income tax at all?
Your claim that this would tax the poor at a far greater rate than it would the wealthy is also unfounded. -Poor people don't buy the same goods as the wealthy. You're trying to compare apples to apples, when you need to compare a Hyundai to a Lexus. The same differential would apply to most of the taxable goods purchased by the two classes. –i.e. 100 TC sheets vs. 1000 TC sheets
Since this post is your brainchild; why don't you tell us how much money the average "working-poor" spend on taxable items and how much the rich corporate CEOs spend on taxable items? When you're done with that, you can tell us about all the income tax loopholes currently used by the corporate CEOs and how those same loopholes are used by the working-poor.
The gauntlet has been thrown down. Support your claims with something more than party-line rhetoric.
Sorry, OMG, you lose. Dan quite correctly pointed out that "Emery's idea would tax the poor at a far higher rate than the wealthy". Fact is, that's the truth - even if you pay more tax when you buy your BMW than I pay on my Yugo, it works out that the average Yugo buyer is spending 100% of his money on sales-taxable goods, while the investor class pays a far lesser percentage.
Does your tax site factor in the different approaches to total sales tax burdens in the respective states? No.
While we're at it, why don't you tell us what, exactly, an "illegal" is?
Chumps like you ought to avoid throwing gauntlets around.
The idea is not only stupid, it's a flaming lie, at least as reported. OMG might buy it, but here are some numbers (fiscal year 2008): total revenue 11 billion, income and corporate taxes 6.7B, sales taxes 3.2B. Sales taxes collected include state, city, county, etc. So, replacing income and corporate with sales tax would require tripling the rate, even if you pretend that all the city and county sales taxes are state revenue. Just more repub financials--piss on your leg and tell you it's raining.
Anonymous 9:24,You are correct. A 1% tax increase would affect those with less money more than it would those with more money to spend. -If you read my post, I did not argue that point. Further, that burden can be adjusted as the law is created. In fact, a tax rebate for qualifying families is already included in the Bill.
"Each family will receive a monthly sales tax rebate based on the number of members in the family and the federal poverty level guidelines to offset the sales tax on basic necessities.”Here’s a link to the Bill Summary.
Getting rid of income tax, and replacing it with an increased sales tax, provides an incentive to save...to create a buffer. If people have a greater incentive to control discretionary spending, they are likely to do just that. In addition, decreased sales will cause the price of goods to drop. Creating a situation, in which the average citizen has a reason to have a savings account, is a good thing.
"Does your tax site factor in the different approaches to total sales tax burdens in the respective states? -I'm not sure that I understand your question. If you are referring to city and county taxes; that would be outside of the scope of this piece of legislation.
Define illegals: An illegal immigrant. One who is in this country illegally. One who is not paying income tax anyway.
Les,"Sales taxes collected include state, city, county, etc." -This piece of legislation only deals with state taxes. Please provide numbers that only relate to taxes charged by the state. A link to your source would be appreciated.
"Officials from the Department of Revenue (DOR) assume this proposal would replace all state income taxes with a statewide sales tax for tax years beginning on or after January 1, 2011. Revenue lost as a result of the repeal of the income tax would be replaced by a levy on all use or consumption of taxable property or services. The sales tax rate would be five and eleven one-hundredths percent, and DOR would develop a method for providing a monthly sales tax rebate for qualified families. The General Assembly could enact one adjustment if the revenue lost as a result of the prohibition on income taxation of income is greater than or less than the revenues received from the new sales tax."You can read the fiscal notes HERE
Please provide numbers that only relate to taxes charged by the state. A link to your source would be appreciated.Here's the 2008 annual report;
http://dor.mo.gov/cafr/financialstatreport08.pdf
I don't feel like holding your hand page by page. As to the math--all sales taxes collected are more than state sales taxes collected. Income and corporate taxes collected are more than twice the total sales taxes collected. The state rate must at least triple to generate the lost revenue. Not rocket science, etc.
All right, I'll do it. Page 8--the $3.2B is the state sales tax, the first chart doesn't include locals. So the rate will only slightly more than triple to replace $6.7B in income tax. Add in the local taxes, and you'll be pushing 20% sales tax.
Les,
Thanks for the link, and the follow-up reference.
"Revenue lost as a result of the repeal of the income tax would be replaced by a levy on all use or consumption of taxable property or services." -That's not my assumption. It's the assumption of the DOR. The DOR operates under the executive- Gov. Jay Nixon (DEM)
Other states manage to operate just fine without a state income tax. -Alaska, New Hampshire, Tennessee, Florida, South Dakota, Washington, Nevada, Texas, and Wyoming all operate without state income tax.
If this proposed "fair tax" didn't have a rebate provision, I would be against it.
...and finally, Les, your calculations don't take into account that people will buy more taxed items with the additional money they have in their pockets. And the jobs that have existed only to handle income tax will cease to exist...an additional cost savings for the state.
The greatest bonus associated with a fair tax, is that people who want to save their money are given an incentive to do so. –Those that work under the table..or have an eBay business will end up paying their fair share. Drug dealers, who currently pay no taxes, will be taxed the same as the rest.
...and finally, Les, your calculations don't take into account that people will buy more taxed items with the additional money they have in their pockets. And the jobs that have existed only to handle income tax will cease to exist...an additional cost savings for the state.The "Fair tax" meets the Laffer Curve. Most people spend substantially all their income now; save them 6%, collect an additional 9-10% on their purchases; sweet. The biggest savers on income tax already have more income than they need to spend, and aren't likely to buy more stuff just to generate revenue for the state. Logic: yur doin it rong. Of course, everyone within shopping distance of a state line will see savings, forcing a higher rate on those not so fortunate.
States without personal income taxes typically make it up in large part with corporate and franchise taxes; but Mo. will eliminate those as well.
The greatest bonus associated with a fair tax, is that people who want to save their money are given an incentive to do so. This is just too stupid to comment on, except to note it directly contradicts your predicted upsurge in spending from all those "savings."
Just like the national "fair tax" bozos, you conveniently forget that the state cannot collect substantially less tax than it already does. Changing from a progressive tax to a regressive (or even "fair", should such a beast exist) can only move the burden around; it won't magically reduce it. Someone has to pay it. This proposal is just another tax shift to the middle class and working poor, to the benefit of the wealthier.
While there are pros and cons to this idea, as others have pointed out that there are other states that have no income tax.
I really don't think it's fair to call the elimination of the state income tax "radical" or "dumb."
However, I am curious how this would affect Missourians living on the border that work in a neighboring state. For instance, if you live in MO but work in KS then you get credit on your MO tax return for the money you spent out of state.
So will these people end up paying a state income tax (to KS) as well as the higher MO sales tax?
Post a Comment
<< Home