Missouri’s tax strategy: Give to the rich and take from the poor

04/22/2014 11:24 AM

04/22/2014 11:24 AM

The skewed priorities of the people who control the Missouri General Assembly are on full display in two tax bills.

One cuts income taxes — but mostly for the wealthy. An

analysis

prepared for the Missouri Budget Project found that 80 percent of the tax reduction would go to the wealthiest 20 percent of Missourians.

Despite that inequity, and projections that it would drain at least $600 million a year from state revenues, both chambers have passed the bill and sent it to Gov. Jay Nixon. He should veto it.

A different measure would ask voters to fund highway repairs and transportation projects for 10 years by raising the state sales tax by one cent on the dollar. The resolution passed the House and won approval from a Senate committee.

So, while treating wealthy Missourians to a generous income tax break, the Republican-controlled legislature seeks to force low-income families and older people on fixed incomes to spend more on the essentials of daily living.

There is no credible evidence that broad-based income tax cuts are of great benefit to a state’s economy. Certainly, they haven’t helped Kansas, which cut taxes deeply over the last two years and is now relying on reserve funds to balance its budget.

The income tax cuts contemplated in Missouri would make it harder to invest in schools and services. And they would leave the state without much of a backup plan for transportation needs if the push for a penny sales tax increase stumbles somewhere on the way to a successful public vote.

Money is badly needed for road repairs and other transit projects, but a universal sales tax is a regressive and questionable way to raise it.

The state’s gasoline tax, at 17 cents a gallon, is the nation’s sixth lowest. It’s disappointing that lawmakers don’t try harder to win political acceptance for a fuel-tax boost to improve highways.

But sales taxes in Missouri are actually quite high. The average combined state and local rate is 7.58 percent — 14th highest in the nation, according to the

Tax Foundation

. A one-cent increase would leave Missouri with the sixth highest combined rate among the states.

GOP-controlled legislatures rarely spend much time worrying about taxing ordinary citizens unduly for essential goods and services. That concern would be front and center in a public vote, however. To set the stage with a huge income tax break for the wealthy would be politically foolish and morally bankrupt.

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