COLUMBIA — The idea of adopting a statewide consumption tax in lieu of traditional corporate and individual income taxes is not novel. Fifteen years ago, three Houston businessmen invested $20 million to study alternatives to income tax nationwide. The idea has since gained a cult following.
The alternative tax plan was popularized by radio personality Neal Boortz and U.S. Rep. John Linder, R-Ga., when they published “The FairTax Book,” which reached the top of the New York Times Best Seller list in 2005.
In 2007, the issue became a hot topic for a few presidential contenders, including former Arkansas Gov. Mike Huckabee, fellow Republican Ron Paul and former U.S. Sen. Mike Gravel, a Democrat from Alaska.
The “fair tax” has gone to Congress numerous times since 1996 and has failed to gain traction. Linder’s most recent legislation has more than 50 co-sponsors, all Republicans, including Missouri’s 2nd District U.S. Rep. Todd Akin, R-St. Louis.
John Putnam, co-director of Fair Tax for Missouri, said it’s the opposite of a top-to-bottom political issue.
“Its popularity is due mostly to word of mouth, grassroots work,” Putnam said. “Presentations at civic groups like Rotary or the Kiwanis Club have done more for it than national figures.”
The “fair tax” movement has become a nationwide, grassroots organization with organizers and activists in all 50 states and a membership of more than 200,000.
When Putnam first started working with the movement, only four states did not impose income taxes. Now there are nine.
“We’re gaining on this,” Putnam said, adding that the Missouri chapter of Fair Tax for America has more than 20,000 members, including more than 300 in Columbia.
Putnam’s “fair-taxers” have been contacting lawmakers, raising questions at town hall meetings and attending seminars to learn how best to promote the cause. They speak about the “fair tax” with an intensity you wouldn’t expect, given that the movement is nascent.
“A lot of people come in thinking, ‘We can’t get rid of the income tax … it’s been around too long,’” Putnam said. “But the more people talk about it, the more they like it, and many of them become outspoken advocates.”
Missouri isn’t the only place the “fair tax” movement is pushing legislation. Two years ago, Republicans in Michigan pushed for a constitutional amendment similar to Emery’s. Although it got “bottled up in committee,” Michigan activists are working with majority Democrats again this year.
“We have a competition going on to see which state will have the economic advantage of being the first to adopt a fair-tax based proposal,” said Ron Babin, deputy director of Michigan’s fair tax movement.
“The economy in Michigan is ripe for a new way to tax,” Babin said. “But Missouri is threatening (our position) to succeed first.”
John Coyne, who owns and runs an insurance agency in Columbia, testified before the House Tax Reform Committee in favor of an alternative tax system. He isn’t affiliated with Putnam’s group but thinks a consumption tax would be a simpler and more universal way for the state to collect revenue.
“We’ve come to accept the government intruding in our liberties like a frog in a boiling pot,” Coyne said. “They’ve been able to get away with it through the income tax. … With a consumption tax, the government doesn’t have a right to my personal information anymore. … I pay my tax at purchase, and that’s it.”
Dentist Colin Malaker of Columbia is the lead “fair tax” activist in Missouri’s 9th Congressional District.
“Everyone’s eyes are on Missouri right now,” Malaker said. “Once Missouri (passes it), other states will follow suit.”
Kansas, South Carolina, Ohio, Oklahoma, Nebraska and New Jersey all have very active consumption tax advocates but none has seen the issue make the gains that Emery and others have made in Jefferson City.
“No one has been able to bring it as far as we have,” Malaker said. “If we’re the first state to do it, we’ll see our economy boom over the next few years.”