State lawmakers consider abolishing income tax

SBJ Staff

Posted online February 2, 2010 | 10:47 am

A proposal introduced in the Missouri General Assembly last week could have a dramatic impact on the state's revenue structure, according to a report from Missouri Digital News.

Sen. Chuck Purgason, R-Caulfield, proposed an amendment to abolish the state income tax, replacing the revenue by increasing the state sales tax. Purgason said the proposal would not increase revenue but instead pull it from different sources, MDN said.

The proposal would expand the current state sales tax to include services, adding tax to items including rent and prescriptions. Legislators think the state sales tax level, currently 4.2 percent, would increase to anywhere between 5.1 percent and 11 percent.

Several legislators have expressed concern about the proposal; Democratic Rep. Chris Kelly, of Columbia, told MDN he worries about citizens in border cities going across state lines to make purchases, along with the potential to drive more consumers to Internet shopping.

Lobbyist Jim Moody, a former state budget director, said the tax would benefit those with high wealth and passive income such as interest and dividends. He added that health care, professional services and utility prices would be most affected.[[In-content Ad]]