A group pushing to replace Missouri's income tax with a broader sales tax said Thursday it has received a million-dollar contribution from a prominent Missouri businessman.
The committee Let Voters Decide said businessman Rex Sinquefield donated $1.224 million to its effort. That is the second large-dollar donation supporters of the tax change have received from Sinquefield, who also contributed $1.3 million in the fall.
Let Voters Decide is working to put a state constitutional amendment dealing with taxes before voters. It is pursuing an initiative petition and supports similar measures that have been filed in the state Legislature. The group's president, Travis H. Brown, said money from the most recent contribution could go toward an ongoing legal fight over the initiative petition, voter-outreach efforts and helping to build support for the state legislation.
Supporters of abolishing the income tax in favor of a broader sales tax contend it will help improve Missouri's economy. The intent is to broaden the sales tax base to offset the revenue the state would lose by scrapping the income tax.
Brown said some neighboring states also are considering tax policy changes designed to reduce income tax burdens and encourage entrepreneurs and small businesses.
"There is a lot of room to begin addressing the lack of fairness, the growth problems and the disincentive to work that our tax code creates," Brown said. "And we'd certainly like to see a more serious conversation about how to get those jobs."
Let Voters Decide wants to phase out the income tax and replace it with a higher state sales tax that would be charged on a wider category of purchases. While the state sales tax rate would be capped at 7 percent, the combined state-and-local rate could go as high as 10 percent. Currently, Missouri has a 4.225 percent sales tax. Of that, 3 percent is for general state revenue and 1.225 percent is for dedicated purposes such as conservation, education and state parks. Local governments also can levy sales taxes.
Opponents of the proposed tax changes contend it would hurt low- and moderate-income residents by requiring them to pay higher sales taxes. Some also have expressed concern that the new revenue collected from the expanded sales tax may not be sufficient to replace what is lost by eliminating the income tax.
Scott Charton, the spokesman for the opposition group Missourians for Fair Taxation, said families would pay a "huge" sales tax on most of their daily purchases. Charton said the coalition of critics is growing and that any financial advantage for supporters would not be enough to win voter approval.
"It's clear that Let Voters Decide's answer is to throw more and more money behind its awful proposal, but they cannot sell it to working class Missourians," he said. "They have a billionaire benefactor with his own agenda, but even a billionaire gets just one vote."
There are two ways for Let Voters Decide to get their idea on this year's ballot. Lawmakers could approve a constitutional amendment, which then must be passed by voters to be enacted. Otherwise, the group would need to gather 146,907 to 159,359 valid signatures from registered Missouri voters and submit them by early May to the secretary of state's office for their initiative petition, which would appear on the November ballot.
Brown said the group is committed to a vote on the tax change.
"Most people don't give seven-figure checks that aren't pretty serious about getting something before the voters," he said.
Let Voters Decide at www.letvotersdecide.com/
Missourians for Fair Taxation at www.DeclineToSign.org