Opponents of Missouri Tax Reform Should Talk Amongst Themselves

The opponents of the tax reform proposal – Missouri Taxpayer Relief Act (MTRA) seem to have problems with consistency – factual consistency anyway.  They are pretty consistent in their attempts to deceive their fellow Missourians!

As we outlined in Tax Reform Opponents Seek to Deceive and Scare Seniors, the deceptions seem to know no end.  The opponents attempt to scare seniors and anyone else in whom they can create fear.

It’s Easy to Create Fear But Not so Easy to Tell Truth for Some outlined the main differences between the estimates of the proponents and the opponents. Subsequently it’s been shown that the only real difference between the opponents and the proponents is in the expansion of the sales tax base.

The opponents claim the expansion is mythical and a shortfall will occur. Well at least some of the opponents do. Some opponents working for the same organization actually declare that everything or almost everything will be taxed.

Is it a sign of the right hand not knowing what the left hand is doing or is it a purposeful attempt to make sure the spectrum of possible confusion areas is covered? Based on what I have observed, it is more likely the latter.

This is an important point for the opponents.  The alleged shortfall is one of the fear tactics they employ. Another one is the attempt to create the false illusion that everything or almost everything will be taxed.  Obviously you can’t have a shortfall and still tax everything or almost everything! These two positions are opposite one another yet the opponents use them both.

The opponents have hired two “experts” to present their fiscal distortions, er, I mean their fiscal positions on the measure.

One of the people hired is a former joint committee staffer, Brian Schmidt, to write some white papers on the topic.  Brian is good guy. I’m not sure if they fed him the “inputs” or not but it’s clear as you read the white papers the inputs were not accurate when compared to the facts of the proposal.

The other person, Jim Moody, has been around Jefferson City a long time in various government positions and longer as a lobbyist.  The last time we had occasion to disagree, we were several hundred’s of millions of dollars apart.  I’m glad to say it came out my estimates were proven correct.  I’m satisfied the same due diligence has been applied toward the MTRA.

So surely with two “experts” they are in agreement on whether an expansion of the sales tax base takes place under the proposal, right? Actually, they are not!

In his submission to the State Auditor’s office on behalf of the Coalition for Missouri’s Future, Jim Moody had this to say about the proposal:

“The only expanded service that could be identified that would be taxed under the new initiative petitions would be cable and satellite telecommunications providers.” And “[…] there are no new revenues to be generated by expanding the services that are taxed under the two initiative petitions.” (emphasis added) http://www.auditor.mo.gov/notes/11-63.pdf

Moody claims that there will essentially be no expanded base and thus a shortfall.

Brian Schmidt doesn’t agree. In one of his white papers, he acknowledges the expanded base:

“Under the proposed sales tax, the number of taxable services would be expanded greatly, impacting purchases made by both households and businesses.” (emphasis added)

Schmidt went on to further identify 44 services that would be subject to tax that currently are not.  He has to in order to make some points in his white paper that ignore data on the issue and the real world experience of Tennessee as can be seen starting about 6:57 mark of this video.

So here we have two “experts” on tax issues disagreeing and they are on the same team!  The only reason to allow this disagreement within is because it makes sure you can use either end of the spectrum to cause confusion and fear!

The opponents will likely say it is a function of the confusion of the proposal itself.  Sounds good – at least until you actually read the proposal and see how plain and simple it is.

Both “experts” apply distortions to their analyses.  So – we are then left with the question “Which ‘expert’ are we to believe?”

Schmidt is right on the expansion of the base but wrong on impacts.

Carl Bearden
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