JEFFERSON CITY, Mo. (AP) — A new coalition came out Tuesday against efforts to replace Missouri’s income tax with an expanded sales tax, marking a growing campaign over a potential constitutional amendment that could go before voters next year.
Leaders of the Coalition for Missouri’s Future, which includes education, business and civic groups, said they are trying to build a broad base of opposition. Critics argue that the tax changes would hurt low- and moderate-income residents by forcing them to pay higher sales taxes on many of their purchases and would leave a wide hole in the state budget, which could hamper social services and education.
“It’s a regressive tax. It hurts seniors. It’s just a bad idea,” said Jim Moody, a leader for the new coalition who was budget director for Republican Gov. John Ashcroft.
Several versions of a possible constitutional amendment have been filed that would ask voters to toss the state’s income tax and broaden Missouri’s sales tax. The new sales tax would cover more purchases and cap the tax rate at 7 percent for most transactions. The cumulative state and local sales tax rate would be limited to 10 percent.
Currently, Missouri has a 4.225 percent states tax. Of that, 3 percent is for general state revenue and 1.225 percent is for dedicated purposes such as conservation, education and state parks. Local governments also can levy a sales tax.
The Coalition for Missouri’s Future includes the Missouri AARP, the Missouri School Boards’ Association, teachers unions and several area chambers of commerce. The new coalition joins another group critical of the tax proposal that was organized by the Missouri Realtors Association and is supported by the Missouri Broadcasters Association and the Missouri Budget Project.
Supporters of replacing the state’s income tax contend it would boost the state’s economy. Travis Brown, president of Let Voters Decide, said the effect on the state budget would be offset by more sales-tax revenue. The impact on seniors and lower-income residents would be mitigated by exempting purchases for necessities such as child care, school tuition and rent.
Calling it a job creator that would amount to a salary increase for workers, Brown challenged opponents to present their own economic development proposal.
“Anyone that doesn’t like our jobs plan, we would ask, what is your plan for growth?” he said.
Let Voters Decided last month received a $1.3 million campaign contribution from Missouri businessman Rex Sinquefield, who also supported a successful state ballot measure campaign last year. The measure bars new communities from enacting earnings taxes and requires periodic renewal votes for the existing earnings tax in St. Louis and in Kansas City.
The latest proposed constitutional amendment would appear on the November 2012 ballot. To come before voters, supporters must collect between roughly 146,000 and 160,000 signatures, or 8 percent of the votes cast in the 2008 gubernatorial election from two-thirds of the state’s nine congressional districts.
Already the new tax debate is hitting the airwaves. The Missouri Broadcasters Association said that last week, it distributed a radio ad and was working on a television ad. Brown said supporters also have started airing radio and TV ads in recent weeks focused in the Springfield-area and were starting to collect petition signatures.
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