Tax Reform

By Jeanette Mott Oxford

Missouri's tax system needs to be modernized and reformed to be fair, adequate, and sustainable

Year after year our appropriations and budget committees hear heart-wrenching testimonies from Missourians of every description: veterans, senior citizens, people with disabilities, teachers and early childhood education advocates, healthcare professionals, law enforcement personnel, community task force members, and on and on. Citizens describe the disastrous consequences of Missouri's underfunding of essential services and inadequate response to pain and suffering.

Legislators often reply: "I wish we could do something about that, but we don't have the money. Who do you want us to cut in order to serve your group better?"

Surely it is time for Missouri to "Wake up and smell the coffee." We can no longer afford to continue this insanity. Nor can we count on the one time or short-term fixes that have bailed us out in the past.

Friends and caring relatives sometimes stage an "intervention" in an effort to help an alcoholic or addict face reality and enter treatment. That is my intent in filing tax reform legislation designed to make Missouri's outdated tax system more equitable, modern, adequate, and sustainable.

The bill that I have introduced with ten co-sponsors will reduce taxes paid for the 60% of Missourians with the lowest incomes. It includes a refundable sliding scale tax credit of $150 per person for families with less than $30,000 income annually. It asks those in the top 40% of income to pay increased taxes. Within these top brackets, there are adjustments as income increases so that those most able to pay bear the highest rates.

This tax reform plan will produce slightly more than $1 billion in new state revenue and must be approved by a vote of the people. Let me describe the plan more thoroughly:

Fairness: Missouri's present tax system treats middle and low-income taxpayers unfairly. The tax burden of those who have the least is nearly twice that of the wealthiest Missourians.

Modernization: The top bracket in our individual income tax system begins at $9,000 a figure set in 1931. In today's dollars, $9,000 is nearly $1.4 million. The brackets should be updated to reflect current economic realities.

Adequacy - Every year the Legislature faces a crisis about how to fund essential services that provide for the common good. A lawsuit involving more than 300 school districts continues over whether the state has failed to meet constitutional funding obligations for elementary and secondary schools. We have a higher smoking rate than 47 other states and are dead last in spending on tobacco use prevention and cessation. We offer less support for quality childcare than any other state, and only three states have more citizens lacking reasonable access to primary healthcare. It's time to admit that we can't fix these problems by budgeting more carefully - we must have more dollars to meet Missourians' needs.

Sustainability + Elected officials keep searching for one-time answers and short-term solutions for our funding crises -- for example, cutting more than 100,000 Missourians off Medicaid or selling the assets of the Missouri Higher Education Loan Authority (MOHELA). But isn't it likely that these fixes do more harm than good? Medicaid cuts shift costs onto local healthcare providers and charities and increase sickness and death. Underfunding higher education causes tuition increases, and underfunding our public schools cheats our children and hamstrings our future economic progress. We need sustainable solutions that will not leave us in the same broken down boat year after year.

Wouldn't it be wonderful for Missouri to no longer be known as "The Forty-Something State," a nickname that indicates its abysmal ratings in practically every measure of social well-being? With this income tax revision plan, we can obtain the dollars we need to pay for essential services and make our tax system fairer at the same time + two excellent signs of sanity.