Proposition A – Let Voters Decide: A Local Government Primer

Proposition A – Let Voters Decide is a pretty straightforward proposal.  Even Wally and the Beaver could understand it!  It seeks to have the people of the state of Missouri exercise the powers they have reserved to themselves regarding taxation issues.  Why is it so important?

An earnings tax is a third level of income tax, the federal and state being the first and second levels.  It takes money off the top of the paycheck of anyone subject to it, leaving less for their families, their churches, charities or other items. We, the people, have the opportunity to halt bad economic policy and taxation before it even gets started!

Yesterday, we blogged about the issue of Proposition A – Let Voters Decide and concerns from some conservatives that a “Yes” vote on Prop A would somehow be violating local control or sovereignty issues (Proposition A – Let Voters Decide: Local Control or Casino Rules?). The real answer to “local control” is that it doesn’t really exist, at least on taxation issues.  Here’s why.

The Missouri Constitution, last updated in whole in 1945 and in part via several amendments adopted by the people of Missouri, establishes the basis for all levels of government in our state.  The people of Missouri through their adoption of the Missouri Constitution have established the fact that there is NO local control over taxes!

But wait you say, ‘I get to vote on taxes at the local level! How can you say there is NO local control over them?‘  It is true that you get the final say whether to adopt them or not. It is not true that you get the final say on having a say.  Here is how it really works.

Cities are political subdivisions of the state.  In other words, cities do not exist without the state creating them. Don’t get confused between cities and communities.  You can have one without the other.  A group of people can choose to live in close proximity to each other, support each other and voluntarily pay dues as members of a community, but have no legal authority to tax or establish any formal, legal government.

On the other hand, a group of individuals can choose to live in close proximity, support each other and petition and vote to incorporate and become a city, as long as they comply with state law in doing so.  If the majority of the voters within the established boundaries choose to do so, then the “community” now becomes a city.

Even after becoming a city, they are not allowed to just tax anything they want.  As a political subdivision of the state, the state determines what they can tax, how they can tax it and so on.  The only local control granted is to the people to accept these new taxes and their rates, which are also usually limited by state statute.

Their is no local control when it comes to establishing what can be taxed, only if it will be taxed.  The people of the state limited cities everywhere from simply adding a specific tax that is not first authorized to them by the state.  Thus, whether it is the well-intentioned conservatives who contend Proposition A somehow violates a non-existent local control idea or the self-serving, public unions, quasi-government entities and government entities trying to take advantage of the “local control” misunderstanding, it simply doesn’t exist.

Proposition A – Let Voters Decide is another example of how the people of the state have established “rules” for the creation of local governments’ ability to tax.  Proposition A gives direction to the state legislature, which is empowered by the Missouri Constitution to determine what taxes a city may or may not enact, not to authorize an earnings tax for any city that already doesn’t have one as of the November 2, 2010 election.  It gives direction to the state to enforce a sunset provision in the two cities which do have an earnings tax.  There is no issue of taking away local control as there is none to be “taken”!

In a republic, we elect our representatives at all levels to do just that, represent us.  Why then do we shackle them by placing the Hancock limitation on them? This is the argument big government supporters make all the time.  They don’t like the fact they can’t waltz into the legislature or city hall or the school board, etc., and simply demand and get more money without a vote of the people! But I digress.

The reason is very simple.  We, the people, have chosen under our Constitution to limit these tax increases to be approved by us. Hancock is applicable in all parts of the state at every level of government.  It was voted on and approved all across the state. Not every locality approved it yet it applies to them just the same.

We, the people, also provided for a means in which we can change statute to allow or prevent issues such as earnings taxes.  Proposition A also is a voice of the people to limit a very bad economic tax to the cities already using them and telling the state they don’t want local cities to have that option available.

The truth is, because Proposition A is a statutory measure, the legislature can change it.  Any city can go to the legislature and ask them to “change” the statute approved by the people to allow “them” to have an earnings tax.  Hopefully good economic policy would prevail and the legislature would reject the request. It will also be tougher for the legislature to “change” the statute if we, the people, have approved it.

Local control issue? NO.  Simply the exercise by we, the people, of powers we have reserved to ourselves to limit government taxation.  A “YES” vote limits bad economic policies of taxation such as the earnings tax from being further promulgated in places where it doesn’t exist today.  A “NO” vote keeps the door open for this very bad economy and job killing tax.

Carl Bearden
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2 Responses to “Proposition A – Let Voters Decide: A Local Government Primer”

  1. […] are authorized.  For those of you who think this is a local control issue, I ask that you read Proposition A – Let Voters Decide: A Local Government Primer.  You will discover that there is no local control that exists today in regards to an earnings […]

  2. […] tells you how you can and can’t implement taxes!  I suggest you would benefit greatly from a basic local government primer on taxes.  Your deceptive “read” of the measure is […]

  3. Mike says:

    The so called “fair tax” would be a terrible mistake. By funding state projects with retail spending, you cannot guarantee a consistent budget from year to year. It will be a hiring and firing disaster for every branch of state government. It will ultimately drive UP the costs of governing, which means so many programs will be poorly administered, it might even start to affect the daily lives of tax-hating conservatives.

    Plus, when the economy is bad, the fair tax will actually be creating a DISincentive to spend, when we need incentives to spend more to get us out of this downward spiral. Large purchases will become very difficult for the people who bear the brunt of bad economies- family at the bottom rungs of the middle class. Who will be loving it are the rich, which is why they have spent millions getting fair tax initiatives into naive people’s minds and on state election ballots all over the US. Unless you are rich, there is no benefit for the fair tax. Think about it.

    • Carl Bearden says:

      First – it is not the “Fair Tax” being proposed

      Second – nearly everything you say about the consumption tax is false.

      The tax reform proposal provides a broader base and an even more stable revenue source than the current revenue system Missouri relies upon – the income tax. Aside from overspending when times are good, the income tax is the primary reason the state has such a large budget hole and has had for years. Dependence on the unreliable, unstable income tax is foolhardy.

      The tax reform proposal will provide the same or more revenue than is collected today and do it more reliably. The large upswings and deep downturns currently experienced would be all but eliminated ensuring stable revenue source for the state functions. It will affect tax-hating conservatives and tax-loving liberals for sure – positively affect them both.

      During bad times, the worse impact you can experience is the loss of jobs. The current Missouri revenue and income tax system discourages job creation and when times get bad leads to higher job losses than would occur under the proposed consumption tax.

      Purchases of optional items are reduced during bad economic times. However, since the necessities of life are not taxed with a small food tax under this proposal nor any used items, when times are bad those most impacted by bad times are not impacted at all.

      Check for how the low-fixed income people will be protected by this proposal.

      If you are satisfied with Missouri being 48th in the country in economic output – continue to support our current failed system. If you think Missouri can and should do better – then support the proposed tax reform.