The text of the bill is very misleading about what will really happen when the implementation occurs. The additional 1% added over current taxes will not be revenue neutral. In fact, they really can't give a solid number of what the actual tax rate will be or quickly become. The idea of making merchants and workmen tax collectors is an undue burden and a disincentive to starting a business. The logistics of prebates, rebates, etc. creates more bureaucracy. Furthermore, poverty is fluid. Categorization of need could change monthly, adding more complexity to an already drained social welfare system. Adding prebates and rebates to food stamps and Medicaid and school lunches just adds another layer to the welfare state.
Balancing the Missouri budget is a moving target because of our current recession, unemployment, and state entitlement mandates. There is no way that Jeff City can balance the current budget given the unknowns muchless know the numbers needed to change the system. Revenue neutrality can only be guessed.
Rich people do not necessarily buy luxury items. The millionaire-next-door is more likely to be the guy next to you in Wal-Mart than the hot-shot in the leased sportscar. Rich people figure out ways to get around taxes. Furthermore, tax policies influence spending patterns, which is why sales-tax holidays are so popular. I know several small shopkeepers whose biggest days of the year are the sales-tax holidays. Missouri recently rejected an additional tax on cigarettes. I know a fellow with a quick stop near the IL border whose business would have dried up had our taxes on cigarettes become higher than IL's. Furthermore, that guy from the next state buying cigs usually buys gas and food while he's here.
Comparing MO's tax burden to other states, particularly Tennessee, is deceptive. TN is a right-to-work state. We also have state liabilities that other states don't have because of our loss of the lead mining business (making Emerson's district the 14th poorest in the country), as well as loss of corporate headquarters in St. Louis and closures of auto plants.
Construction will be seriously effected. Of course new construction will be taxed. Lumber will be taxed. New refrigerators will be taxed. We will become like European countries that have 20% vat taxes. Lucky tourists get the money back when they leave the country but the locals have to pay it. This is a step to the European-ization of the US.
The text of the bill is very misleading about what will really happen when the implementation occurs.
You better tell that to the Missouri legislature. They wrote the bill! The bill is patterned after The Fair Tax Act(HR25/S296). You would realize the similarities if you took time to read HR25/S296!
The idea of making merchants and workmen tax collectors is an undue burden and a disincentive to starting a business.
Missouri merchants are already tax collectors for the existing sales tax!
The logistics of prebates, rebates, etc. creates more bureaucracy.
Please explain how one form of taxation
replacing two forms of taxation will increase the bureaucracy.
Furthermore, poverty is fluid. Categorization of need could change monthly, adding more complexity to an already drained social welfare system.
The prebate is determined by the Department of Health & Human Services’ existing poverty level guideline table.
Fair Tax FAQ#3. The table changes at most once per year.
Adding prebates and rebates to food stamps and Medicaid and school lunches just adds another layer to the welfare state.
Administering the prebate will be offset by eliminating the far larger bureaucracy required to print, send and record for the multitude of income tax forms people must file.
There is no way that Jeff City can balance the current budget given the unknowns muchless know the numbers needed to change the system. Revenue neutrality can only be guessed.
What unknowns? You know the rate will be 5.11%! You also know a sales tax base code is far more stable than an income tax since unemployed people will still make purchases during an economic downturn as opposed not paying income taxes when they are laid off.
Rich people do not necessarily buy luxury items.
They buy far mroe luxury items then lower income people.
The millionaire-next-door is more likely to be the guy next to you in Wal-Mart than the hot-shot in the leased sportscar.
The millionaire next door has more discretionary income to spend than a lower income person and therefore tend to purchase big ticket items more often.
Rich people figure out ways to get around taxes.
Explained to me how one gets around paying a sales tax when it is applied at the point of sale. Is this a rampant problem with Missouri's existing sales tax?
I know several small shopkeepers whose biggest days of the year are the sales-tax holidays.
That's due to them paying a sales tax on top of an income tax! The state Fair Tax will replace both with only one tax.
Comparing MO's tax burden to other states, particularly Tennessee, is deceptive. TN is a right-to-work state.
Tell that to the state of Missouri who is losing tax dollars to neighboring states because of the higher overall tax burden.
Of course new construction will be taxed.Of course new construction will be taxed. Lumber will be taxed. New refrigerators will be taxed.
New items will not be taxed if purchased by businesses. New items will be taxed for private consumption but will be offset their increase in purchasing power due to more money in their paychecks, the reduction in prices due to the elimination of embedded corporate taxes passed onto the consumer and the prebate.
We will become like European countries that have 20% vat taxes.
You are not paying attention. HJR56 will be the antipathy of a VAT since it will remove the all VATs caused by embedded corporate taxes applied at each stage of production.