The FAIR Tax proposal is headed for debate in the Senate. But some key legislative leaders are doubtful about its chances. The proposal would replace the income tax with much higher sales taxes. Lawmakers know that if they do not put it on the ballot this year, a well-financed petition campaign likely will.
A senate committee recommends passage of the bill. Senate leader Charlie Shields does not think the bill will pass but he expects a robust debate. In the event it does clear the Senate, the proposal goes to the House, which passed the bill last year. But this year, Speaker Ron Richard sees problems. “I just want to make sure there’s not any uncertainty about where we’re moving, about schools formula, about libraries, about fire districts…And I can see the amendments on the floors now, everybody getting exempted out to kill the bill….I don’t think St. Louis can take 11 or 12 or 13 percent sales tax on their retail. I don’t think that would work and I don’t think that’s proper,” he says.
Critics worry about what would happen to business in border cities such as St.Louis with cities just across a state line where the tax is half that, or less. They say the active discussion needs to be held. But in today’s economy, this is the wrong time to pass such a law.
There’s no indication when the senate will reach the proposal on its list of bills for debate.