Why I’ll Be Working Against The Newest St. Louis Sales Tax Proposal
Several years back Pat Martin, long-time head of Missourians For Tax Justice, worried about the plethora of new sales tax proposals on the state legislators’ and municipal leaders’ agendas. She began openly discussing the need for a moratorium on new sales taxes.
The idea was not well received.
Back then the total sales tax load at some shopping areas in the St. Louis area was nearing 8¢ on the dollar. Today the average rate is about 8¢ and some county locations are at 9.613¢ (including downtown Kirkwood and part of Maplewood) and one area in Richmond Heights collects 10.613¢ atop every buck. Several shopping areas in St. Louis city are at 10.769¢, meaning the table rounds-up to 11¢ on the dollar.
[ http://dor.mo.gov/pdf/rates/2016/oct2016.pdf ]
So, talk of adding another half cent to the sales tax load makes this a great time to review the problems with sales taxes…
❶ Sales taxes are inherently regressive. Low-income families spent a greater portion of their money on items taxed (especially food). High sales taxes account for Missouri having a higher effective tax rate on the poor than most other states.
❷ Sales taxes are frequently diverted. Many Tax Increment Financing, Transportation Development Districts and Community Improvement District taxes benefit for-profit developers and businesses.
❸ Internet sales make sales taxes a bad bet. In 2016 you can buy fresh carrots via internet shopping sites, avoiding sales taxes. Knocking on doors I came across hundreds of shopping boxes on porches, and, all experts predict growing internet sales. (Of course, most low-income families can’t do this since they lack the internet connections and the credit cards necessary.)
❹ Individuals can’t get a tax break on sales taxes. You can’t deduct what you leave behind at Target the way you deduct property tax payments.
Now, I am friends with several members of law enforcement: none of them belong to the St. Louis Club or Bellerive Country Club (though one lives next to a golf course). I firmly believe that we need to pay cops better and provide them with more technical support. And, of course, everyone deserves to be safe in their work and to be able to come home unhurt.
How do we better fund law enforcement? I say increase the property tax, perhaps even creating a dedicated portion of that annual tax bill listed as Law Enforcement Support.
In other words, let the folks in Huntleigh do their fair share.
Every time there is talk of increasing the property tax the automatic response is ‘what about the impact seniors?’ Yes, many of our older neighbors struggle to maintain their homes. That’s why Missouri’s “Circuit Breaker” system to limit the pain on lower-income senior citizens needs to be maintained. Remember though that low-income seniors are stung by higher sales taxes too. And, don’t forget that many over 65 folks are “one percenters.” Again, just because their older doesn’t mean the residents of Huntleigh are trying to figure out the food stamp application.
True, I am a heretic. Conventional wisdom – spurred by radio commentators – demands that we not tax the overburdened rich folks. These “job creators” need to pay less in taxes so that they can come up with new ideas to expand our economy. If they think that Right To Work and eliminating Missouri’s minimum wage are the way to go, well, they have more money so they must be right. The American thing to do is to subsidize rich people.
Still, let’s draw a line in the sand. Yes, we need more money for police and other basic, necessary government services. Good services improve real estate values. Let they who profit from those higher values contribute to the cause.
Remember Pat Martin.
Glenn Koenen
23 November 2016