The State Senate Governmental Accountability and Fiscal Oversight Committee is considering this year’s version of legislation that aims to replace the state income tax with an expanded sales tax. If approved by the General Assembly, SJR 29 and SJR 37 - rolled into a single joint resolution – would ask voters to change the Missouri Constitution to institute a version of the so-called Fair Tax.
Among those appearing at a Senate hearing to speak in favor of the legislation was Carthage businessman John Putnam, who wants simplicity.
“I came to believe that the theory of the sales tax was a viable concept, that it was simpler than the income tax, that it was fairer than the income tax,” said Putnam to the panel.
Former State Representative Ed Robb (R-Columbia) insists that while the consumer would see added taxes on the bill paid for goods and services, those taxes are already there but are hidden because they are rolled into the final price.
“The corporation, itself, doesn’t pay taxes,” said Robb. “Businesses don’t pay taxes. Those are all imbedded in the cost of the goods and services that they provide the consumers. Only consumers ultimately pay all taxes.”
Former State Budget Director Jim Moody, now a Capitol lobbyist, opposes the idea, fearing it will tax things that are not now taxed.
“You’re going to tax a lot of things that you’re not currently taxing,” said Moody. “And the biggest thing you’re going to tax is healthcare.”
He claims it would bring about a womb to tomb tax on health care services.
“You have a kid, when it’s born, you’re going to pay sales tax on the delivery by the doctor and pay sales tax on the hospital,” said Moody. “When you’re at a nursing home near the end of your life you’re going to pay sales tax to the nursing home and you’re probably going to pay sales tax – some of it’s currently taxed – when you’re put into the ground. The box is currently taxed. I think a lot of the other services are not taxed.”
A similar proposal passed the House last year but stalled in the Senate.