Rep. Andrew Koenig (R-Koenig) presented his version of the Rex Sinquefield sales tax hike in a House Committee this morning, professing to care about whether or not his plan would be revenue neutral (i.e., bring in as much revenue with a higher, broader sales tax as is produced now by the corporate and income taxes he wants to eliminate).
Yet Koenig, Sinquefield and the others on Rex's payroll continue to insist on a seven percent cap on the state sales tax rate, even though nonpartisan and independent analyses have show that such a cap would be devastating to state revenues.
It's no longer a matter of real debate:
- The Joint Committee on Tax Policy evaluated a Senate "fair tax" proposal last year, and found that the state sales tax rate would have to be 7.56%-7.94% to be revenue neutral, and at least 10% if the state created a rebate/prebate program. This was reported by the News-Leader's Roseann Moring as recently as December 18, and the Committee's analysis can be read here.
- Jim Moody, a lobbyist who used to be Governor John Ashcroft's Commissioner of Administration, looked at the numbers and found that the plans put forward by Sinquefield would "bankrupt the state, or in the alternative, bankrupt the poor and the working lower and middle income classes..."
- GOP gubernatorial candidate Peter Kinder cited Moody's analysis as one of the reasons why he's flip-flopped on the whole issue.
- Research conducted by the Missouri Budget Project and Institute on Taxation & Economic Policy determined that the sales tax rate with a prebate program would need to be close to 11% to be revenue neutral. Their study, published in February 2010, may be found here, and you can read testimony from the ITEP submitted to the Senate in January 2010 here.
- The Center on Budget and Policy Priorities issued a report in September stating that Missouri would have to raise its sales tax rate to 11 percent or more under the 2010 proposals to replace lost revenue from the personal and corporate income taxes and franchise taxes.
- Senate President Pro Tem Rob Mayer (R-Dexter) has acknowledged that seven percent is not realistic.
Any questions?
