The Missouri Budget Project Is Wrong
When you keep repeating an error that others have corrected for you and explained to you multiple times why it is incorrect, it ceases to be merely an error — you border on becoming willfully obtuse. Such is the case with the Missouri Budget Project’s continuing claim in its talks and writings about the Missouri “Fair Tax” bill that the legislation would require an 11-percent state sales tax in order for the state to maintain its revenue stream after eliminating the state income tax. As Show-Me Institute executive vice president and University of Missouri–Columbia economics professor Joseph Haslag demonstrated in a recent case study that he wrote with Show-Me Institute intern Abhi Sivasailam, that revenue-neutral rate would be about 5.8 percent.
There are certainly legitimate arguments one might make against the Fair Tax proposal — simply stating, perhaps, a belief in in the fairness of progressive income taxation, wherein one’s tax burden automatically increases with income. I would disagree with that argument, but it is a perfectly legitimate argument to make because it doesn’t employ a demonstrably false set of facts. Repeating a figure based on a faulty set of assumptions about a proposal in order to score political points through fear, however, is not a legitimate form of argument.
The Missouri Budget Project again used its 11-percent sales tax figure in a Saint Louis Beacon op-ed today. Only a few days ago, I witnessed two economists tell the author of the MBP piece that her number was incorrect. They corrected her politely and professionally, and explained why it is wrong. Months ago, the MPB also received a copy of the Show-Me Institute’s case study, which went into great detail on the question and explained again why their 11-percent estimate is far too high. Unfortunately, they’ve continued to repeat their unreliable figure at every opportunity.
If you want to argue against Fair Tax legislation, that is fine with me. And, yes, it is likely that different people will come up with somewhat different estimates for how high the revenue-neutral replacement level of the sales tax would need to be. But if your estimate differs so dramatically from everybody else who has studied the issue that it appears to be just plain wrong, you should cease using it once that has been brought to your attention — or attempt to demonstrate where your opponents’ reasoning is faulty, in a detailed, systematic way. And if you don’t, people should stop taking you seriously.