Missouri Municipal League joins fight against dropping state income tax
This article first appeared in the St. Louis Beacon, Dec. 8, 2011 - The Missouri Municipal League is among the latest groups to join both statewide coalitions in opposing the proposals to eliminate Missouri's income tax and replace it with a larger sales tax.
Missourians for Fair Taxation, which calls the plan the "Almost Everything Tax," is announcing the league's support as part of the opposition effort aimed at discouraging Missouri voters from signing the petititons needed to get the tax swap on the 2012 ballot.
The league also has joined a companion coalition, the Coalition for Missouri's Future.
Dan Ross, the league's executive director, says the proposed constitutional amendment would increase the financial problems that cities and towns already face. "It doesn't take an economist to see that this won't generate enough revenue,'' Ross said in an interview. "It will just make things worse."
Backers of the change, led by a group called Let Voters Decide, contend that eliminating Missouri's income tax -- now largely 6 percent -- and replacing it with a sales tax will encourage economic development. The proposed sales tax would be restricted to no more than 10 percent, including the local sales taxes already imposed.
Let Voters Decide is now in the midst of collecting the signatures from registered voters to get the proposal on the 2012 ballot.
Ross said that the 10 percent restriction would likely force some communities to reduce their local sales taxes, which had been approved by voters. The proposal would limit the statewide sales tax to no more than 7 percent, up from the 4 percent or 4.225 percent that the state now imposes.
Both sides cite dueling budget experts. Missourians for Fair Taxation, which includes the state's real estate industry, contends that the change would reduce state income by at least $2.5 billion a year -- forcing severe cuts.
Let Voters Decide contends that the economic growth would increase sales tax revenues, and bring in more state money. Let Voters Decide is primarily bankrolled by wealthy financier Rex Sinquefield, one of the state's most prominent campaign donors.