“Fair Tax” for Missouri
An article in yesterday’s Fulton Sun discusses the “Fair Tax” in Missouri (link via Combest), an issue we’ve covered here before. In short, a bill passed the state House during this past legislative session that would have eliminated Missouri’s income tax, replacing it with a higher sales tax, although the Senate did not consider it before the session ended. Specifically, the bill would have changed hiked the state’s sales tax from 4.225 to 5.11 percent, while eliminating the 6-percent income tax. Dubbed the “Fair Tax,” because it taxes at a flat level, the proposed tax change alone is regressive; however, to make up for this, the bill also would have provided rebates to low-income households.
The “Fair Tax” bill would also have eliminated the 6.25-percent tax on corporate income, a significant enticement for businesses to move their headquarters to Missouri. With the incentives the bill would create for businesses to relocate here, and for Missourians to marginally increase the number of hours they’re willing to work, its proponents expect the bill would positively impact Missouri’s economy. They plan to try again to pass it during the next legislative session.
Though the “Fair Tax” would be even more effective if passed at the national level, because there would be fewer loopholes to circumvent the tax, it would still be a boon for Missouri if passed only statewide — and the benefits it would provide to the economy would create an example for other states to follow.