Missouri's Version of the FairTax

Whoa - I didn't see this one coming! When I first learned of the Fair Tax idea, I couldn't comprehend how it would work in our society. I had become so accustomed to the various taxes in our nation, that the simplistic idea of a singular tax seemed impossible. Upon further investigation, I think this would be more beneficial to our citizens. I am, however, wary of how this concept will work in our state and not concurrently on a federal level.

Regardless, you should know:

Missouri lawmakers are considering a drastic change to their tax system. A bill recently passed by the state’s House of Representatives would allow residents to vote on a Constitutional amendment that would eliminate corporate and individual income taxes in the state and replace them with a broad based sales tax. The plan is essentially a state version of the national FairTax proposal popular with some grassroots groups that would replace the federal income tax with a national sales tax. If the Senate passes the bill Missouri residents would be voting on the amendment in November of 2010.

Missouri currently has a sales tax, a corporate income tax, and a personal income tax. The sales tax rate is 4.225%, and the top corporate and personal tax rates are 6.25% and 6%, respectively. The plan put forth would replace all those taxes with a single sales tax levied at a rate of 5.11%. Accompanying the sales tax rate hike would be a substantially broadened sales tax base that would include all purchases. Currently most services are tax exempt and certain goods, most notably groceries, are taxed at a reduced rate of 1.225%. These exemptions would not exist under the new tax structure.

I have found it difficult to obtain unbiased information about this tax but there are a great many blogs that address the proposal.

Click Here to read The Tax Foundation's article

Click to visit the MO Fair Tax site