Oxford Proposes Tax Reform

From State Rep. Jeanette Mott Oxford:

Tax Reform: It’s Time for Missouri to “Wake Up and Smell the Coffee”

A friend who attends Alcoholics Anonymous meetings told me that AA groups define insanity as doing the same thing over and over again and expecting different results each time. Having been a public policy advocate in Missouri for 20 years now and an elected official for two Legislative Sessions, it is easy to label Missouri’s budget process as “insane.”

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, veterans, 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 That is my intent in filing tax reform legislation designed to make Missouri’s outdated tax system more fair, adequate, and sustainable.

The bill that I am introducing would reduce taxes paid for the 60% of Missourians with the lowest incomes. It includes a refundable sliding scale tax credit of $150 per person that phases out between $30,000-50,000 for single people and at $60,000-80,000 for married couples. 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 heaviest load.

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. The starting place for the top bracket has remained at $9,000 since 1931 even though that equates to more than $550,000 in current dollars. By updating the brackets to reflect today’s economic realities, we take a major step toward fairness.

Adequacy - Every year the Legislature faces a crisis about how to fund essential services that provide for the common good. 327 school districts are suing the state for failure 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 assets from 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 more fair at the same time. We must have the courage to face reality and put an end to our budget insanity.