Replies

Sales tax-concepts hurt the middle-class and poor the most. Unless you exclude food and clothing (as Massachusetts did in the 1970’s), they will pay a disproportionate cost because food and clothing take a greater percentage out of their disposal income. The rich don’t need to buy things. Furthermore, 75-80% of Missourians live within 20 minutes of another state. So if I planned to buy a product, I would seriously consider buying it in Kansas and avoid the MO sales tax. Same with a house. Why build a house if it is inflated by sales taxes paid on materials? Young people who want to buy cars and houses will have to delay or completely forget acquiring things. If people can’t afford the taxes on a new house, they won’t build one. This doesn’t help the construction worker, the lumber yard owner, painters, and etc. Missouri’s current unemployment rate is 9.6%. Any major change in taxation would influence consumption and, ultimately, employment. Sales tax holidays are big days for retail. Cash for Clunkers was Obama’s most successful idea and the $8000 tax credit for home buyers is a key reason the real estate market is holding as well as it is. If anything, sales taxes should be lowered or eliminated, not become the backbone of an entire taxation system.

Kansas is pushing the same proposal. So the border argument is a moot point. Illinois sales taxes are already higher than Missouri. 1 cent is not going to be noticed.

I admire champions for the poor. However confiscation of state taxes leaves less disposable income available to make purchases on necessities. And I repeat, the tax is indexed to federal poverty guidelines so no low income consumers will be adversely affected.
In addition, since lower income consumers tend to purchase used cars they will no longer pay sales tax on that transaction.

Building a house? Taxes are already built in to the overall costs of construction in the payroll taxes withheld and matched by the contractor. Same with the material. Income Taxes are already built into the cost of he material.

Perhaps if a border company don’t have to pay matching withholding income taxes on their employees, they can lower their cost of doing business which would offset .091 cents you are so worried about breaking the bank with.

In addition to your post, Cash for clunkers was a FAILURE. It caused a spike in sales which fell off dramatically after the program ended. Plus, the federal government borrowed the money, so everyone, not just the people who bought cars, will be penalized with higher taxes.

Government money going into cars or housing only delays the inevitable, breaks the federal treasury, and causes a crash that will take years to recover. Watch out for the kool aid.

I loved the statement - “The rich don’t need to buy things.” And as such should be responsible for financing the middle class and the poor? This is the problem with the entire system. If everyone were affected by the costs of government, there would be more engagement regarding what was spent on whom. IMO, the poor would benefit from a requirement to share some of the responsibilities.

Sales tax-concepts hurt the middle-class and poor the most. Unless you exclude food and clothing (as Massachusetts did in the 1970’s), they will pay a disproportionate cost because food and clothing take a greater percentage out of their disposal income.

I suggest you read up on the Fair Tax Act(HR25/S296)before making a blanket statement. You would have realized people will receive a rebate at the beginning of each month for the tax on necessities(food, shelter, clothing, medical care) up to the poverty level. The middle class and poor will benefit the most since effective tax rate(after the prebate is factored) will be lowest in comparison to their salaries. The Missouri Sales tax proposal also includes a prebate. Additionally lower income people tend to buy used big ticket items. The Fair Tax will not tax used items thereby benefiting lower income earners the most.

The rich don’t need to buy things.

Oh really? They don't buy food, clothing and shelter? The prebate for high income earners will be a very small percentage compared to their wages. Consequently the effective tax rate will be nearly the full amount. High income earners tend to spend more money on luxury items not covered by the prebate.

Furthermore, 75-80% of Missourians live within 20 minutes of another state. So if I planned to buy a product, I would seriously consider buying it in Kansas and avoid the MO sales tax. Same with a house.

You may want to reconsider. Missouri's reason for this legislation is due to the state losing revenue to surrounding states because Missouri's overall tax burden is greater. The Missouri Fair Tax legislation will replace individual and corporate income taxes with a flat rate sales tax of 5.11%

Why build a house if it is inflated by sales taxes paid on materials? Young people who want to buy cars and houses will have to delay or completely forget acquiring things.

Used homes will not be taxed. New home prices won't be inflated because there will be no business to business tax that can be passed onto the consumer. People will have more money in their paychecks to purchase big ticket items with the elimination of income taxes. All the embedded corporate income taxes in products purchased under the income tax will be removed thereby lowering the cost.

Any major change in taxation would influence consumption and, ultimately, employment.

You are correct! People will spend more with more money in their paychecks! More consumption will grow businesses and increase employment!

If anything, sales taxes should be lowered or eliminated, not become the backbone of an entire taxation system.

The current sales tax, along with the state income tax will be replaced with a single sales tax. This will lower the overall tax burden.

You can read the summary of MO-HJR25 at the following website: Summary of the Introduced Bill

Not only was cash for clunkers a failure, a blatant giveaway to the auto companies and dealers, but the home buyer tax credit has been another failure, temporarily propping up prices only to have them fall further when the sugar high is over.

Let the free market work, stop pushing your socialist government intervention!

Those poor and middle class will be tax FREE - any legal citizen that signs up for it will get a ‘prebate’ which is how much a family of their size would spend for taxes on necessities up to the poverty level. And prices will not skyrocket...at all. The rich don’t need to buy things? HA! The ones I’ve been around didn’t buy most things because they NEEDED them.
Housing costs will NOT be inflated, as the FairTax is ONLY placed on the END product. NO business to business tax. NO tax on used items, from clothing to cars.
Your fears/concerns are from being misinformed.

The numbers have been run on new house purchases in Missouri. 3% increase over current costs. We still seem to have an adequate supply of used houses that are tax free.

Food and clothing.

What do you see many poor people buying? Many that I see are buying Nike air shoes and pre-packaged, processed to death food. If they had any sense, buying used clothing and making more of their own food would result in a tax savings for them.

Massachusetts doesn’t have the pre-bate. We currently exempt much of food purchased in a store right now. That excemption is going away if we get the fair tax in Missouri.

Cross border
Kansas in watching closely with the fair tax. Oklahoma might just beat us in the race to get the fairtax in place. Going to Illinois, I would guess will not be any bargain.
Tennessee has never had a state income tax. How many car production plants have they gained? How many automotive jobs have we lost?

We are talking about 9/10th of a cent in increased taxation, to be rid of corporate taxes, individual income taxes. The economic growth and more employed Missourians is a heck of a deal in trade.