Last night, Tim and Dana Woodsome of Cruisin 66 (they sell Big Dog and Victory motorcycles – go buy one from them!) hosted a presentation on the Missouri Jobs Act for small business owners. It was a very chilly, damp night but the folks who turned out were interested, engaged and enthusiastic!
Dana shared with the group the efforts they just went through in a recent tax audit. You can see the stack of boxes of information they have put together so far in the upper left of this photo. And the audit isn’t done yet!
It’s clear that small business owners get what the elimination of the state income tax and replacing it with a consumer driven sales tax would do for the state’s economy! They understand that it would free resouces up not only for them to expand their businesses but for their customers as well. The more money in their customers’ pockets, the more likely they will buy products.
I’ve given several presentations on the Missouri Jobs Act proposals. The only way to defeat this solid, proven tax reform proposal is to try to create a fear of the unknown. The problem is that most of what we are proposing is a KNOWN. Tennessee has been doing what we are proposing for over 60 years. The composition of the states are similar. There are those who don’t want you to hear about Tennessee or to know that the Missouri Jobs Act isn’t something “never done before anywhere,” but it’s actually an expansion of a model state tax system that is working well!
Those who don’t support the tax reform effort acknowledge that our tax system isn’t functioning well. Their answer? Tax the job creators even more and otheres who are already paying the most taxes and expand the pool of non-taxpayers. We are already reaching a dangerous precipice, which will soon collapse from the weight of those not paying income taxes over the support of those who do. In the event you or someone you know may believe you are not being taxed enough, you can write a check to the state for any amount that would soothe your guilty conscience.
It’s clear that when people get the correct information, when they understand that the opponents are offering nothing but fear, they respond positively to the tax reform proposal. You can count on hearing and seeing more about how the Missouri Jobs Act will benefit Missouri, and that it is based on a tried and proven approach!
Carl,
Could you email me the calculation that shows that a larger state sales tax would bring in enough state income tax revenues to offset the loss of revenues if the state income tax was eliminated. I’m assuming that you have had a reputable, nonpartisian economic forecasting group analyze this. I would be interested in supporting an elimination of the state income tax if I could see the actual calculation that shows it would be revenue nuetral to the state and not increase taxes on lower income taxpayers. Thanks.
Stephen Mestres CPA
Stephen – thanks for your comment. The initiative petitions ballot language and fiscal note have been challenged in court. The proponents of the initiatives will rightfully be wary of providing additional information until the court case works through the process.
Revenue neutrality is not difficult to achieve or understand. One need look no further than our neighboring state Tennessee. They have had no income tax and have been operating with a sales tax as their primary source of income for well over 60 years.
Take a look at this example from Fiscal Year 2010 state revenue collections. Tennessee collected over $6.1 billion from its sales tax in FY10 using a narrow, hollow tax base, which includes a 6% sales tax on food. Missouri collected just over $6.1 billion from individual income and sales and use taxes in FY10. The MJA proposals would tax a broader base of goods and services than Tennessee does, which means they would easily meet the revenue needs of the state.
Not only do the majority of initiative petitions keep corporate income taxes which brought in over $500 million in FY10 but the state would continue to collect other general revenue sources that brought in about $440 million in FY10.
Tennessee does not offer any sort of rebate to low income individuals. Eight of the nine initiative petitions require a rebate be provided to low income individuals while the ninth petition simply requires a rebate which could still be focused or limited to low income people.
Thanks for your interest. Be sure to come back and see the updated information that will be posted on our blog.