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I used to live in Missouri, and it’s a state where most of the people are decent and sane – so I have faith that this proposal will get shot down before it becomes law:
The Missouri Senate opened debate Thursday on a bill to replace the state’s income tax with a higher and broader sales tax. The bill would phase out the state income tax over a five-year period, beginning in 2013. In its place, the state sales tax would be expanded to include services and raised to as much as 7 percent. The measure also would require consumers to pay tax for currently untaxed services such as child care and legal work, and also eliminate dozens of exemptions now in place on items such as food and prescription drugs.
The effort to pass this legislation is being bankrolled by Rex Sinquefield, a super-wealthy retired investor who is also pushing the cities of Kansas City and St. Louis to eliminate taxes on earnings.
The most accurate term for this nonsense is "War on the Poor." Any measure that shifts taxes from income to consumption – especially ones that include necessities such as food and childcare – shifts the burden more to the shoulders of low-income earners. It’s bad news for everyone, because it will drive more people from working class to poverty – which will increase the amount of welfare expenditures required of the state. It will also exacerbate the health care and housing crises, because people will be less able to afford their insurance premiums or their mortgages.
It’s an idiotic idea all around. What’s on your mind tonight?
11 Comments
Yeah, it’s a pretty silly idea. Sales/consumption/VAT taxes are pretty regressive as they’re usually defined.
It’s convenient how financial products are always excluded from discussions of sales taxes.
There’s a lot going on and much more coming soon.
Hurray for Canada! They held/had a good Olympics. Vancouver is apparently a terrific place.
I like that Obama and Gates are going strong on getting rid of nukes. We should all be lovin’ that.
I am finally feeling some relief that HCR will be done soon. I just hope it all works over the coming decades.
I’m glad there’s been more attention given to ecological things like chemicals in our food. I wonder if attention has also been given to poisoned waters which affects sea life and plastics in the oceans which strangle life.
I haven’t heard of any political discussions in Israel which might parallel discussions about the U.S. Senate. That would be very good. I hope Sen. Bennet’s proposals get a good airing.
Poor poor Greece. I hope the world doesn’t entirely hate us for our ‘rapacious’ financial people. We really need the right regulations and good oversight.
I’d love to see more done to promote jobs, but it’s not so easy for gov’t to do it. We can obviously support the states and prevent severe bankruptcies. We can work on tax reform to promote more U.S. capital investments — as I think Kerry, Wyden & Grassley may be doing.
These are huge issues. Let’s get ‘er done.
TX doesn’t have a states tax, but the property taxes for local costs such as the community college, and sales tax, are pretty steep. We get retirees locating here for the lack of sales tax. And more than 1,000 who use an address at the local r.v. park so they can avoid paying state taxes.
Where does the state of Texas get its income? Or does it just spend less per capita than other states?
Jim, good post. I have some questions if you don’t mind. Where are all the states going to get the money to survive if they don’t all raise taxes? No politician talks of slashing needless expenses and everyone has them. What they do, is when in need, increase taxes or user fees. With the debt of the nation where it is, there really is going to be only two alternatives left soon. Slash, or tax. Sadly governments never tax crap spending. Never. What is going to happen is massive slashes to programs combined with tax increases. This is just the beginning. It has to happen this way. We are in for a lot of hurt.
You make some good points. Taxes will have to be raised if states are going to survive. But I don’t think the answer is to eliminmate income tax and reinstitute sales taxes on necessities. To me, this seems like a way to lower taxes on the wealthy and raise them on lower income people. If we’re going to increase the tax burden, it needs to be increased on those who can withstand it. At its essence, this is a struggle between one group of people who are trying to feed their families and another group of people who are worried they might have to sell their vacation home.
I don’t disagree with you at all. But if you look at other nations, all their governments are doing this. In Canada, they are merging various taxes so that they apply to damn near everything, in order to increase revenues to the government. See? No tax increase *wink wink*. It’s absurd for politicians to talk of tax cuts continually. There is a limit to any cuts and we are now at it. End of the line. Can’t slash revenues any more. So the alternative is to try and get as much money as you can off the majority of people. Can’t tax the rich you know, so the opposite is to bang the hell out of everyone else. Like I said, this is just the beginning. Look at Greece. Now expand what is happening there. It’s going to happen. Has to. Debt forgiveness is not in the stars anywhere, so it’s slash and burn, or tax like hell or a combination of both. In this economy it means massive pain for all but the rich.
Exactly. And I blame the American people as a whole. Every election cycle, we cheer when a candidate says tax cuts and boo when they say tax increase. If we can’t be a little smarter than that as an electorate, we don’t deserve a common sense approach to taxation and spending.
Taxpayers/voters tend to think all these social programs are free because they don’t pay for them out of their wallet. Listen to pundits talk about the “free” healthcare in Canada. It isn’t free. It’s paid through various taxes, including income tax. It’s a great idea to have all these social programs but they have to be paid for. People don’t understand that at all.
The same thing could be said about foreign wars.
No, it won’t increase the amount of welfare expenditures to the State of Missouri because they won’t increase benefits–it’ll just be TS for poor people. It’s like NJ–they want to cut unemployment benefits because the state is in a fiscal hole, and our new Republican governor doesn’t like the increase in the business tax that will result from the unemployment fund being a billion dollars in the red. The benefits are what would be considered generous in most states, but given the cost of living in NJ, that money won’t keep a family afloat.