I am continuing last week’s article on HB 253 (the tax bill) with two of the main reasons I cannot support the bill.
It is my understanding that if HB 253 passes, all prescription drugs will have sales tax added to the cost. This could make medications, especially for those people on fixed incomes, unaffordable. Also, for those of you who have college students, textbooks would have sales tax added, making college even more expensive.
Myth: HB 253 provides broad based tax relief for Missourians, the first cut in nearly 100 years.
Fact: Missouri has implemented a number of significant tax reforms over the last 35 years, starting with the Hancock Amendment to Missouri’s Constitution in 1980, which limits growth in state revenue and provides refunds to taxpayers when state revenue grows faster than the limit allows. During the height of economic growth in the late 1990s, Missouri refunded more than $995 million to taxpayers due to the Hancock Amendment.
In addition, Missouri approved a number of tax reductions over the last twenty years that combined to reduce state revenue by about $1 billion annually. These reductions included the following: Elimination of the state general revenue sales tax on groceries in 1997; Increases of the personal exemption and dependent deduction for state income tax in 1998; In conjunction with federal law, Missouri repealed state taxes on estates/inheritance in 2001; Elimination of the state income tax on Social Security and Public Pensions for those who rely solely on that income in their retirement in 2007; and Eliminated the corporate franchise tax in 2011.
Myth: States without an income tax are a mecca from economic growth.
Fact: States with higher income taxes are doing better than states without an income tax on many indicators.
A comparison of property taxes per capita in 2009 indicates that Texans paid considerably more than Missourians in property tax: Texas Property Tax Per Capita: $1,475; 14th highest in nation; Missouri’s Property Tax Per Capita: $929 14th lowest nationally; Texas has much higher additional regressive taxes than Missouri: Missouri’s sales tax rate is 4.225 percent, while Texas’ sales tax rate is 6.25; Missouri’s gas tax is 17.3 cents, Texas’ gas tax is 20 cents; Missouri’s cigarette tax is 17 cents/pack, Texas’ cigarette tax is $1.41 per pack; Missouri’s beer tax is 6 cents/gallon, while Texas’ beer tax is 20 cents/gallon
Myth: Many businesses are leaving Missouri to relocate in Kansas due to their new tax scheme.
Fact: There were 15,008 new business filings in Kansas over the last year (1,362 more than the previous year’s), but there was 0% net growth in business filing, the second worst net growth rate in the past decade. Evidence suggests that businesses are changing their filing status to take advantage of the new tax breaks, not new businesses moving to the state.
Moreover, research shows that businesses and entrepreneurs look for the quality of the workforce, access to customers, access to infrastructure and quality of life indicators when determining where to locate, expand or invest. These factors are dependent upon well-funded public services and infrastructure.
I hope this article is informative. As always, I respect your trust and value your advice, comments and questions. Let me know how I may serve you and your family. Now that the Legislature is adjourned, I am home in the District. I would be available to meet with groups or individuals locally. Please call me at (573)751-9459, toll free at (855)285-3781, locally at (636)299-3270 or (636)462-7295. If you wish to fax my office, our number is (573)522-0441. You may email me at email@example.com or firstname.lastname@example.org. You may also check the final outcome of legislation at www.house.mo.gov.
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