Tax Reform Facts

Tax reform is the most important issue for our state’s economy. The fact that Missouri ranks a dismal 48th in overall economic growth shows that our current system is not working. Here are some interesting facts on how tax reform in Missouri could help turn our economy around.

Why does Let Voters Decide support tax reform?

Tax reform is the most important issue for our state’s economy. The fact that Missouri ranks a dismal 48th in overall economic growth shows that our current system is not working. Replacing the personal income tax with a broad-based sales tax would put money back in Missourians’ paychecks. That means we have more money to spend and can provide better for our families, grow our businesses, and attract new residents to Missouri. Our increased spending will generate more jobs.

 

What is the Missouri Taxpayer Relief Act?

The Missouri Taxpayer Relief Act is based on the simple idea that working people should not be taxed twice on their income. This act would replace the individual income tax with a consumer-driven sales tax. That means Missourians would pay taxes on the things they choose to buy – not on the fruits of their labor.

 

By how much would the sales tax increase?

The Missouri sales tax would increase by less than 3 percentage points. Yet, Missouri would become a much better place to live and work. We would keep businesses here and attract new ones. The plan would cap the overall sales tax at 10 percent except in a handful of neighborhoods throughout the state that have voted for special taxes.

 

Will replacing the personal income tax with a broad-based sales tax hurt low-income families?

No. The measure protects low-income families by exempting such necessities as health care, rent and child care. Also, families who use food stamps to purchase groceries will not have a sales tax applied to their bill. Right now, Missouri’s highest income tax rate  - 6% – applies to all earned income over $9,000. The working poor in Missouri pay a high income tax and would enjoy relief from that tax. Most importantly, the Missouri Taxpayer Relief Act will help low-income families by bringing growth (and therefore jobs) to our state.

 

How will passage of the Missouri Taxpayer Relief Act affect our state’s ability to pay for things like our parks, roads and state police?

Passage of the Missouri Taxpayer Relief Act will increase the state sales tax by less than 3 percentage points while also expanding the list of items subject to the sales tax. Yet, by making Missouri a much more attractive place to live and own a business, sales tax revenue will expand significantly. Sales tax revenue is much more stable than income tax revenue, so we will have fewer crises in state government. That means the Missouri Taxpayer Relief Act would put us in a better economic position than we are in now.

 

How do we know that Missouri would be better off without a state income tax?

We can see a real-word working model right next door in Tennessee. Tennessee does not have an income tax, and it is thriving. Missouri is losing jobs, but Tennessee is gaining them. Both private- and public-sector workers are doing better in Tennessee, where the overall tax burden is just 80 percent of Missouri’s.