By now, most of you know that I am against adoption of
the “Fair” Tax in Missouri. Well, “against” is too strong a word. Let’s just
say that I’m highly skeptical of the proposal
as it currently stands, although, with changes, this
might be a workable idea.
While some folks might wish to support the current
plan on philosophical grounds, anyone who does so and holds or runs for elected office in
the State of Missouri needs to be able to
defend
the
specifics of the current proposal
(as defined in SJR 29), or at least offer solutions/alternatives/separate
legislative proposals that address areas of SJR 29 that appear to be unclear.
This is, at the very least, what candidates and current office holders owe to
Missouri taxpayers.
As you have probably heard,
Morningline will host a “Fair Tax” debate on March 12 from 7-9 between
State Representative Ed Emery, who is a strong supporter of the tax plan, and
Amy Blouin (from the St. Louis-based Missouri Budget Project), who has expressed skepticism
that the tax figures offered by Emery and other proponents are accurate. March
12 will be a great opportunity to try and get to the bottom of questions about
the “Fair” Tax proposal.
However, with the full senate slated to begin
consideration of the “Fair” Tax proposal later this session, the time is now to
formulate questions to pose to those who would have our state tax system turned
upside down—perhaps for the better, but perhaps not. My crystal ball isn’t very
accurate most of the time. I think if “Fair” Tax proponents are truly honest
about it, they’d admit the same for theirs.
Feel free to chime in with questions of your own—either
via posts to this blog, which we will try to ask during the March 12
th
show, or by calling us during the show when we’re talking about the “Fair” Tax.
For now, here are some questions that I’d like to have
answered, and that SJR 29 does not address in any meaningful way.
1)
Where will the money come from
to pay for the first several monthly “prebates”, which, given the size of the
state’s population, will cost tens of millions of dollars
PER MONTH
out of a FY
2012 state budget already projected to be $1.5 billion in the red?
Is the state somehow supposed to borrow this
money when it is going to have to ax over $1 billion from an $8 billion
general fund for FY 2012?
2)
Rep. Emery and John Putnam spent
an hour with me on the air in January assuring all of us listening that the
proposed 5.11% tax rate was the product of expert calculation designed to
ensure “revenue neutrality” once state income taxes are discontinued. My
response to them was,
“how can you be so
sure that 5.11% is the right rate to get the job done?” We all found out a
week later—they can’t be! Now, the “Fair” Tax folks are admitting that the tax
rate may need to be as high as 6.2%. I’m not upset that Emery and Company were
wrong. I’m upset that they could be so smug and naive as to believe that statistical
projections (which are wrong all the time—look at what the economists put out)
can be trusted as though they’re Holy Scripture. This leads me to my second
question—
“How can you be so sure that
6.2% is the right rate to get the job done?”
3)
So as not to steal everyone’s
thunder who may wish to propose a question or two on the issue through this
blog or during the show, I’ll ask only one more question, for now: under the
“Fair” Tax system, where all services become subject to whatever the state tax
rate ends up being, can anyone tell me
who
is going to provide assistance to all the ten-year-old paperboys,
twelve-year-old babysitters, and fourteen-year-old neighborhood lawn cutters
who will have to obtain a tax ID number from the state? As a follow-up, does
anyone know if there’s a minimum age on being able to operate the credit card
swipers these kids will probably need to start using for customer transactions?