by Missouri Rep. Ed Emery (R-126 including the counties of
Barton, Dade, Jasper and Polk)
"Remember, a dead fish can float downstream, but it takes a live one to swim upstream."--W.C. Fields
Last week elimination of Missouri's income tax hit a snag with the cautions expressed by Speaker of the House, Ron Richard, whose support is crucial to tax reform. There are also a growing number of special interests who believe that by taxing consumption rather than income, they will lose advantages they enjoy under the income tax code. Sometimes such resistance results from an inaccurate assessment. It is critical to remember that this tax reform is "revenue neutral." In other words this is neither a tax increase nor a tax decrease. It changes the method of collecting taxes, not how much we collect or even how we spend what is collected.
We experienced a set-back of sorts on the anticipated tax rate. One of our economists found a major error in the U.S. Census Bureau numbers of over a billion dollars. In addition, new pressures are developing to exempt certain goods or services that have not been taxed previously - this reveals a fundamental misunderstanding of the purpose and impact of the tax prebate. Prebate ensures a level of tax-free expenditures for every Missouri family and to protect Missouri's lowest income families.
In spite of an increasing current against true tax reform, the final details are coming together to define a new tax structure for Missouri's future. This new structure will remove power from government and restore it to the individual. It will bring a level of transparency that is impossible with the income tax. It takes us a step back from mercantilism (where government picks winners and losers) and empowers individuals and small businesses. Nevertheless, those who believe collectivism and progressivism superior to individual liberty and the free market are mounting their offences.
Political winds are also not making tax reform any easier. The speaker of the Missouri House is apparently not inclined to move the House bill this year - or so his public comments would suggest. It is reported that he stated HJR 56 will not move forward in the House and is not on his list of priorities this year due to the serious economic crisis. I respectfully disagree with Speaker Richard's assessment of the right timing for tax reform and eagerly look forward to a time to discuss tax reform with him.
I believe the change from an income tax to a consumption tax will be the most effective jobs creation and economic development bill in decades, will remove power from government and return it to the people, and will profoundly improve Missouri's prospects to restore prosperity. Sales taxes are much more stable in hard times than income taxes, so what better time to stabilize state revenues, create jobs (projected at 20,000 per year every year), and spur economic development by private industry than in a tough budget year? The current may have shifted, but those of us who believe the fundamentals of the Missouri Fair Tax will just have to swim upstream. There is no time like the present.