New Podcast: Dr. Joseph Haslag of the Show-Me Institute onTax Reform in Missouri
May 5, 2010
The Missouri General Assembly is considering a resolution that would allow Missourians to vote on a constitutional amendment to eliminate the state’s individual income tax (which has a top rate of 6% on income over $9,000) and corporate income tax (6.25%) and replace the revenue with a broad-based sales tax on all consumer goods and services. The state’s current general sales tax rate is 4.225%, and the new rate would be 5.11%. Missouri’s current sales tax base includes about 30 percent of all consumer goods and services, according to Dr. Joseph Haslag, Executive Vice President of the Show-Me Institute and the Kenneth Lay Chair in economics at the University of Missouri-Columbia, who discusses the proposal on this week’s Tax Policy Podcast.
“Consumption is historically extraordinarily stable as a tax base so that’s perceived as one potential advantage. Consumer spending is about two-thirds as volatile as income,” Haslag says. “One advantage could be could be that you get a less volatile tax base.”
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