One of the bigger issues facing state lawmakers next year will be whether to junk state government’s entire income tax system but jack up the sales tax rates. Backers of the Fair Tax want to eliminate personal income and corporate income taxes, replacing those taxes with higher sales taxes that would be charged on more things. One supporter has told us the legislature “will pass the fair tax or won’t pass anything.”
Representative Andrew Koenig of Ballwin calls the present system a failure. “Any tax does damage to what you’re taxing,” he says. He says a bigger sales tax does the least amount of damage.
Other supporters say it’s unfair to make people who earn more money pay more taxes. Opponents say increasing sales taxes will hit low-income Missourians hardest because they pay a greater percentage of their incomes for sales taxes than rich people do. But Koenig says the Fair Tax proposal handles that by having the state send checks to people below the poverty line that will offset that higher percentage.
Opposing Senator Joseph Keaveny of Kirkwood thinks it would be a mistake for the state to put all of its income eggs into a sales tax basket. “To be totally dependent on one form of funding would be a mistake,” he says.
Apparent incoming senate leader Rob Mayer says the issue will be aired in the Senate but he’s not saying either it gets passed or nothing will.
The comments were made on the program “Capitol Dialogue,” which is seen on local access cable channels throughout the state.