Missouri income tax initiative faces ballot wording challenge

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September 27, 2011

By Bailey Ludlam

Missouri

SPRINGFIELD, Missouri: The proposed Missouri income tax replacement initiative continues to face legal challenges. Shortly following approval of new versions of the proposed text, a group opposing the measure called Missourians for Fair Taxation filed a lawsuit challenging the ballot language.

In March 2011 the same group challenged the ballot wording drafted by Secretary of State Robin Carnahan. The group called the summary, "insufficient, unfair and likely to deceive and mislead voters." Additionally, the lawsuit argued that State Auditor Tom Schweich failed to differentiate between the nine filed initiatives and could have estimated the fiscal impacts based on information provided by state agencies, supporters and opponents.

The most recent lawsuit argues that the recently approved ballot language is vague. The text says that the measure may earn the state $300 million or cost it $1.5 billion. According to reports, "Republican [Auditor] Tom Schweich says that there are too many variables involved for his office to roll-up its sleeves and crunch the numbers."[1]

The new text reads as follows:[2]

Shall the Missouri Constitution be amended to:
  • eliminate taxes paid by individuals based on income or earnings and sales and use taxes, including taxes paid by corporations and individuals, with certain exceptions;
  • require the legislature to impose an expanded state sales tax on all sales and services, and allow the legislature to increase taxes up to 5½% on purchases of food and 7% on other sales and services, with certain exceptions; and
  • require that state and local cumulative sales tax rate not exceed 10%, with certain exceptions?
Annual state government revenue under this proposal may increase by up to $300 million, or decrease by up to $1.5 billion. The proposal is estimated to increase state operating costs by at least $15 million, and may accelerate tax credit redemptions. The fiscal impact to local governments is unknown.

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