Advocates of national sales tax set sights on Missouri

COLUMBIA, Mo. -- Backers of a proposal to scrap most income taxes in favor of higher sales taxes are setting their sights on Missouri as they try to build support for state reform that they hope can spur national change.

Such plans have languished in Congress for the past decade. And besides early support from Mike Huckabee and several other 2008 GOP presidential hopefuls, the issue has failed to gain widespread traction on a national level.

But in Missouri, a proposed constitutional amendment replacing the state income tax with a higher and expanded sales tax passed the House with substantial support from both Democratic and Republican lawmakers earlier this year before dying in a Senate committee.

Organizers of the national "FairTax" movement are focusing on Missouri this weekend as they aim to increase nationwide membership to 2 million voters, including at least 10,000 in each of the 41 districts represented by a member of the federal House Ways and Means Committee. They expect at least 5,000 people to attend Saturday's rally at the Boone County Fairgrounds, where scheduled speakers include radio host Neal Boortz, Republican congressman John Linder of Georgia and Samuel Wurzelbacher, better known as "Joe the Plumber" from the 2008 presidential campaign.

Rally organizers hope to attract more Democrats and independents to an issue that has primarily been the province of conservative Republicans. That kind of support will be impossible to ignore, advocates say.

"The progress made on the state legislation excited a lot of people in Missouri," said Ken Hoagland, a spokesman for Americans for Fair Taxation, the group pushing the national plan. "There's a real disconnect on this issue between the American people and the inside-the-Beltway crowd."

Nine states don't assess income tax, including Florida, Texas and Tennessee. In some states such as Georgia and Michigan, FairTax supporters are trying to get measures on the ballot.

More than 50 members of Congress -- all but one of whom are Republican -- are listed as co-sponsors of Linder's pending measure, which would eliminate federal taxes on individual and corporate income, Social Security, unemployment and more. Also on the chopping block: the Internal Revenue Service.

Consumers would instead pay a flat 23 percent sales tax on retail goods and services.

Supporters suggest the revised tax code would generate enough money to maintain existing services.

Critics counter that the projections don't add up, saying the flat tax rate would have to be closer to 30 percent to produce similar revenue.

They also note that while all Americans would pay the same rate, the poor would end up spending a greater share of their paychecks.

"In places where people are struggling to meet their family's needs, they're going to have an even harder time," said Amy Blouin, executive director of the Missouri Budget Project, which lobbies for low-income residents.

While the Missouri proposal called for an increase in the sales tax from 4.225 percent to 5.11 percent, Blouin's group suggested that a rate of at least 9 percent would be needed to replace the lost income tax revenue.

Still, in Missouri the issue was less partisan than it has been nationally. State Rep. Chris Kelly, a Columbia Democrat, co-sponsored the state legislation calling for an increase in the state sales tax, subject to voter approval.

"An expanded sales tax makes more sense than income tax," he said. "It's much easier to collect. Sales tax is far more universal. Everybody pays. And it's harder to cheat."

The FairTax movement grew out of an effort by several Houston businessman who were dissatisfied with the IRS tax code. The issue has since been recast with a more populist bent. The Missouri rally, for instance, will draw upon the organizing efforts of the Tax Day "tea parties" that took place around the country April 15.

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On the Web:

Midwest Fair Tax Rally, www.midwestrally.com

Americans for Fair Taxation, www.fairtax.org

Missouri Budget Project, www.mobudget.org