Missouri Income Tax Replacement Initiative (2012)
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The measure would phase out income taxes while levying a state sales tax on more purchases. According to reports, the sales tax would be capped at 7 percent and would include goods and services.
The measure is referred to as the "Missouri Taxpayer Relief Act" by supporters and the group called Let Voters Decide. Opposition group Missourians for Fair Taxation called the measure "Almost Everything Tax," while the Coalition for Missouri's Future refers to the measure as Everything Tax.
On February 10, 2011 Missouri State Auditor Tom Schweich said the costs or savings associated with the proposed measure cannot be determined. According to a report by the The Kansas City Star an open-records request revealed that Schweich's office said "the impact on state revenues could not be determined because there are too many actions required by lawmakers and too many uncertainties about how consumers will respond to the new tax."
Text of measure
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;
- require that state and local cumulative sales tax rate not exceed 10%, with certain exceptions; and
- provide for a real property tax credit for eligible homeowners?
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 $12.9 million, and may accelerate tax credit redemptions. The fiscal impact to local governments is unknown.
The proposed initiatives were filed by Marc H. Ellinger, but reports indicate that Rex Sinquefield is a main supporter.
Supporters of the proposed measure argue that the changes would help the state's economic development. House Speaker Pro Tem Shane Schoeller said, "I can guarantee you that for employers, if they don't have to worry about income tax that's an incentive that they appreciate, that they want to have when they're looking at their business model and moving to a state."
In response to the proposed phase out of income taxes and sales tax increase, Gov. Jay Nixon said, "That's a significant tax increase on things that — for a lot of good reasons — have not been taxed in the past. And to make that sort of dramatic shift at this juncture would be problematic."
On June 24, 2011 the Missouri Association of Realtors board of directors approved a statement that announced their opposition to the proposed "Fair Tax initiatives." The association labels the proposal a "radical proposal" that they argue would "trigger chaos, disruption and lasting damage to responsible government and Missouri’s economic future."
In early November 2011 a new non-profit organization - Coalition for Missouri's Future - announced their efforts to oppose the proposed initiative. The group is composed of business, education and labor organizations, according to reports.
- See also: List of ballot measure lawsuits in 2012
|2012 measure lawsuits|
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Michigan • Massachusetts • Minnesota
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Oregon • Rhode Island
|By lawsuit type|
|Ballot text |
Motivation of sponsors
Rogers v. Missouri Secretary of State, et al.
In early March 2011, a lawsuit was filed challenging the proposed measure's ballot summary and fiscal note. The suit was brought by a group called Missourians for Fair Taxation, opponents of the proposed measure. Attorneys Khristine Heisinger and Chuck Hatfield filed the challenge.
Specifically, the lawsuit calls into question the ballot summary drafted by Secretary of State Robin Carnahan. The group calls the summary, "insufficient, unfair and likely to deceive and mislead voters." The group specifically points to the fact that the text currently states that the measure would impose an expanded sales tax. That, they said is not the case. The measure would instead mandate that the legislature impose one but they argue that the text does not specifically state what would happen if the legislature refused.
Additionally, the lawsuit argues 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.
New versions of the proposed measure were approved for petition circulation on September 14, 2011. Shortly thereafter Missourians for Fair Taxation filed a lawsuit in an effort to change the ballot language. According to the group, the new 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."
Path to the ballot
- See also: Missouri signature requirements
To qualify for the ballot, each initiative requires signatures from registered voters equal to 8% of the total votes cast in the 2008 governor's election from six of the state's nine congressional districts. Signatures on behalf of all initiative petitions for the 2012 ballot are due to the secretary of state’s office by no later than 5 p.m. on May 6, 2012.
- Missouri Secretary of State clears new income tax replacement initiative text
- Missouri income tax initiative faces ballot wording challenge
- [[Opponents challenge Missouri income tax repeal summary and fiscal note]]
- Carnahan approves initiatives relating to income and sales taxes for circulation
- Initiative relating to Income, Earnings and State Sales Taxes: version 1a, 2a, 3a, 4a, 5a, 6a, 7a, 8a, 9a, 10, 11, 12, 13
- Public News Service,"Is New "Everything Tax" Proposal Wrong for MO?," December 27, 2011
- Lake News Online,"Battle of the taxes: Group advocates for sales tax over income tax," November 29, 2011
- Southeast Missourian,"Missouri ballot proposals would end income tax, replace it with higher sales tax," October 14, 2011
- The Kansas City Star,"Momentum grows to swap income tax for sales tax in states," August 21, 2011
- News-Leader,"'Fair tax' proponents strategize," February 24, 2011
- Riverfront Times,"Sinquefield's Tax Reform Labeled "Fiscally Untenable"; Could Require 12% Sales Tax," February 4, 2011
- Associated Press,"Group seeks to swap Mo. income tax for sales tax," January 7, 2011
- Associated Press,"Analysis: Groups debate name for Mo. tax measure," November 27, 2011
- Columbia Daily Tribune,"Proposals on sales tax vary in nine ways," February 21, 2011
- Associated Press,"Group files proposal for 2012 vote on replacing Mo. income tax with expanded sales tax," January 7, 2011
- Missouri Secretary of State,"Two Initiative Petitions Relating to Income, Earnings and Sales Taxes Approved for Circulation for 2012 Ballot," September 14, 2011
- Missouri Secretary of State,"Two Initiative Petitions Relating to Income, Earnings and Sales Taxes Approved for Circulation for 2012 Ballot," October 12, 2011
- The Kansas City Star,"Missouri auditor says costs of ‘Fair Tax’ proposals can’t be judged," February 11, 2011
- Missouri News Horizon,"MO Auditor: Can't Determine Impact of "Fair Tax" Initiatives," February 10, 2011
- Missouri Secretary of State,"Constitutional Amendment to Article X, Relating to Income, Earnings and State Sales Taxes, Version 13 2012-076," retrieved October 13, 2011
- Riverfront Times,"Missouri Realtors Lead Fight Against "Fair Tax" Initiative," June 29, 2011
- Associated Press,"Mo. Gov. Nixon criticizes sales tax proposal," February 10, 2011
- Associated Press,"Missouri businessman contributions $1.3M to committee supporting tax overhaul ballot measure," October 7, 2011
- Associated Press,"APNewsBreak: Group pushing tax change gets $1.2M," January 26, 2012
- Missouri Association of Realtors,"MAR Vows to Uphold the Will of Voters Against the Unfair Tax," June 27, 2011
- St. Louis Post Dispatch,"Group begins campaign against Sinquefield's tax plan," November 1, 2011
- St. Louis Post-Dispatch,"Opponents challenge ballot wording for income tax repeal," March 3, 2011
- Riverfront Times,"Lawsuit Filed Against Latest "Fair Tax" Proposals," September 26, 2011
- Missouri Secretary of State,"Nine Initiative Petitions Relating to Income, Earnings and State Sales Taxes Approved for Circulation for 2012 Ballot," February 21, 2011