If the State Auditor Can't Estimate It, Then It's Very Likely Too Radical a Shift

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In what is surely a blow to anti-taxers and so-called “fair tax" advocates, Missouri State Auditor Tom Schweich recently said that the impact of ballot initiatives to eliminate the state’s income tax and replace the revenue with an expanded sales tax cannot be estimated.

Through a Freedom of Information Act request, the Kansas City Star determined that “Schweich’s office said the impact on state revenues could not be determined because there are too many actions required by lawmakers and too many uncertainties about how consumers will respond to the new tax.”

One of the largest questions about these initiatives is what the sales tax rate would need to be to ensure that this radical shift is revenue-neutral. Despite the Auditor’s misgivings about offering an estimated rate, ITEP and others have. For example, a recent ITEP analysis based on legislation from last year found that the rate would need to be more than 11 percent. Jim Moody, a lobbyist who used to be Governor John Ashcroft's Commissioner of Administration, found that the sales tax rate would need to be more than 12 percent. He went further, calling the ballot initiatives “fiscally untenable” and suggested that they would “either bankrupt the state or, in the alternative, bankrupt the poor and the working lower- and middle-income classes.”

Tax rate estimates aside, if the State Auditor can’t estimate the impact of this radical change to the state’s tax structure, that should be the first clue that perhaps this ballot initiative, bankrolled by millionaire anti-taxer Rex Sinquefield, isn’t in the best interest of most Missouri families or businesses.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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