Capitol protesters denounce fair tax

Thursday, March 4, 2010 | 9:34 p.m. CST

JEFFERSON CITY — As state leaders prepare to develop a budget with less money than last year, about 100 protesters gathered on the front steps of the Capitol Building Thursday to denounce cuts to social services and proposed changes to the state's tax structure.

The rally, held by Mexico, Mo.-based Grass Roots Organizing, included speeches about issues affecting the poor in the state, including access to health care and higher education, as well as proposals in the General Assembly that would scrap the state's income and corporate taxes and replace them with what supporters call the "fair tax."

To offset lost income tax revenue, the fair tax would increase the state's sales tax rate, as well increase the number of items and services that would be subject to sales tax.  Services such as health care and tuition, which are currently not subject to sales tax, could be taxed as part of some fair tax proposals.

Show-Me Institute founder and former investment banker Rex Sinquefield was public enemy No. 1 for the protesters. Sinquefield has bankrolled efforts to institute a fair tax in the state.

On the Capitol steps, demonstrators introduced "Rex", a young man in a top hat and a large green cloak with dollar signs emblazoned upon the front, as their representation of Sinquefield.

Demonstrators carried signs showing the St. Louis businessman's name and face on a "wanted" poster with the moniker "Sin Man" above his image. After speeches at the Capitol concluded, the group walked a few blocks away and continued protesting in front of the office of Kent Gaines, a lobbyist for Sinquefield.    

Robin Acree, the director of Grass Roots Organizing, called the fair tax plan a "radical scheme."  

"This is a risky gamble," Acree said. "This is not a casino. We are not going to be your social guinea pigs."

In an address to the crowd, Brenda Procter, a co-founder of Grass Roots Organizing, discussed ideas for the state to raise revenue. Her suggestions included updating the state's income tax structure, instituting a "streamlined" sales tax that collects revenue from Internet transactions and eliminating tax exemptions for out-of-state corporations with operations in Missouri.

"We have many solutions to budget problems besides cutting services for Missourians," Procter said.

As the protest took place outside the Capitol, the Senate debated a bill proposed by Sen. Chuck Purgason, R-Caulfield, that would institute the fair tax. The bill was held over for a final vote until after the legislature's week-long spring break. If passed, the decision to enact the plan would be subject to approval by Missouri voters.     

Calls to Sinquefield's and Gaines' offices were not returned Thursday afternoon.


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Preston Witherspoon March 6, 2010 | 1:08 a.m.

If this bill is truly similar to the Federal FairTax bill, there is a provision in it to "prebate" to ALL families in the state the amount of taxes they are expected to pay based on poverty-level spending estimates (from the federal department of Health and Human Services).

In other words, "necessities of living" would be essentially untaxed. This frees up every family in the state to spend all their money as they wish, and if they live with necessities only, they will end up paying 0% (or less) net tax.

If the Missouri legislation does NOT contain the "prebate", then this legislation should NOT be considered even related to the federal Fair Tax bill. It is the "prebate", by definition, that makes the Fair Tax truly fair.

Now... if there IS a prebate in the Missouri legislation, and these so-called "poor advocacy" groups are still opposing the FairTax, then the groups are NOT working for the benefit of the poor, only for their OWN benefit. Because the poor and middle class pay less total tax dollars with the federal FairTax, and they have full control over their money.

As an out-of-state observer, I do not yet know the full content of the Missouri FairTax legislation. If it mirrors the federal FairTax, Missouri might just become a hotbed of economic investment after the FairTax goes into effect (no state taxes on businesses, meaning business will line up to invest in MO, plus MO residents have full control over how they spend their dollars). If it does NOT contain the prebate (and therefore does NOT mirror the federal FairTax), then this is just a poorly-named sales tax, and it WILL affect the poor and middle class adversely.


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