The National Tax Foundation (NTF) publishes a lot of great, helpful information regarding the impact of taxes throughout the 50 states. A couple of months ago, NTF published per capital rankings for state and local tax burdens. Not surprisingly, Missourians pay more in state and local taxes per capita than do our Tennessee neighbors.
The NTF data shows that in 2009 (the most recent data available), Missouri ranked 34th in state and local tax burden per capita. The closer to number one you are, the higher your tax burden.
Some will say: “Thirty-fourth – that’s not bad.” I do agree that 34th is better than 33rd, and it’s certainly better than 1st. The dubious “honor” of being #1 goes to New Jersey. So, what’s the problem? It’s that we can do better, and there is a clear way in which we can!
United for Missouri is supporting a tax reform proposal that would eliminate the individual income tax and replace with a consumer-driven sales tax. The result would be a more dynamic economy in Missouri. The only negative impact would be on the current “rent-seeking” community’s ability to get more of your hard-earned tax money when income tax collections go up. However, most people will think this “negative” is a good thing!
Our next-door neighbors in Tennessee have operated under a similar model for more than 70 years. How’s it working for them? They are growing faster than Missouri. They are attracting more businesses. They are attracting more wealth. And they have a lower tax burden.
In state and local taxes per capita in 2009, Tennesseans only paid about 80% of what Missourians paid. Tennessee was ranked 47th in state and local tax burden per capita. And, Tennesseans paid $2,752 per capita compared to the $3,425 paid by Missourians. (The complete report can be found here.)
The proposed tax reform will change Missouri’s economic status for the better. It will result in an immediate and permanent increase in take-home pay for all Missourians who pay income taxes today. It will foster an environment for job creation not only for us, but for our kids and their kids.
I have some family history in Tennessee. There was even a town named after the family, subsequently annexed by Knoxville. But despite any familial connection I may have with Tennessee, I am a native Missourian.
I believe that Missourians are as smart and capable as Tennesseans. Tennessee’s tax model works well for that state. There is no reason to think that Missouri can’t make the Missouri model work for all of us!