Anti-income tax group seeks to cap combined sales taxes at 10 percent
This article first appeared in the St. Louis Beacon, Aug. 12, 2011 - - Let Voters Decide, the group seeking to eliminate Missouri's income tax, today submitted two new initiative-petition proposals -- both which would cap all state and local sales taxes so they jointly levy no more than 10- cents on every dollar spent.
The group earlier had submitted nine similar initiative petitions, with the aim of getting at least one on a 2012 statewide ballot. The effort is being bankrolled largely by wealthy financier Rex Sinquefield, who believes that Missouri's economy would improve without a state income tax.
Marc Ellinger, lawyer and spokesman for the group, said that all 11 versions of the proposal to end state income taxes would broaden the base of items and services subject to the state sales tax.
The two new versions phase in the shift from income taxes to higher sales taxes. The first phase would go into effect in 2014, when Missouri's income tax (now 6 percent) would be reduced to 3 percent. The state sales tax, now roughly 4 percent, would increase to 5 percent.
In 2016, the state income tax would be eliminated, and the state sales tax allowed to rise to 7 percent. Corporate income taxes would not be affected.
Critics contend that the state sales tax would need to be much higher than 7 percent in order for the state to collect close to the same amount of revenue that it does now with an income tax. That concern has prompted divisions within the Republican-controlled General Assembly, even though several GOP leaders -- including House Speaker Steve Tilley, R-Perryville -- seek to end the income tax.
The initiative-petition efforts are aimed at getting around any legislative resistance, by going directly to voters.
The two new initiative-petition versions each contain the 10 percent overall sales tax cap, and require that local and county jurisdications recalculate their existing sales taxes rates to see if they should be lowered since the base has been expanded.
The new versions also delve into property taxes, and lay out a tax credit system for property owners with annual incomes under $75,000 a year.
The new versions would allow the General Assembly to declare a state of emergency, and subsequently increase sales taxes or reimpose an income tax -- but for one year only. Such an action would require a two-thirds vote in each chamber.
The proposals would not affect earnings taxes in the city of St. Louis and Kansas City, which were reaffirmed by local voters last spring. Sinquefield financed the successful campaign last fall to bar earnings taxes in any other community in Missouri.
Ellinger said it will be later this fall before Let Voters Decide decides which of its 11 anti-income tax measures will be circulated for signature collection. The group will need to collect signatures from roughly 147,000 to 160,000 registered voters residing in at least six of the state's nine congressional districts. The number depends on which districts are selected.
The nine earlier proposals already have been certified by the state for signature collection. Ellinger onoted that the state review process will be take at least 45 days for the two latest versions.
For any of the initiative-petition measures, the signatures must be turned in by May 6, 2012.
The effort was praised by Carl Bearden, head of United for Missouri, another group funded by Sinquefield.
"The repeal of the income tax would bring real growth to Missouri, as it's been proven time and again that businesses flourish in states without an individual income tax," Bearden said in a statement. He noted that "such necessities as child care, health care and rent would be exempt from the sales tax."