[MHT]

The tax needs to be revenue-neutral and the advertised rate of 5.11% doesn't do the job. The state already has a deficit. The Mo Fair Tax revenue neutral rate would be approximately 12.5%--which is alot higher than Illinois sales tax. It would cost the average MO family approximately $2200 per year over their current state income tax. However, those families making more than $1-million would see their taxes drop by more than $22,000 per family. It is an appeal to get retirees who don't need to buy stuff to move to MO. TX and FL already get this demographic and MO weather is not as good. Add the local sales taxes to the 12.5% (which could go up if this percentage doesn't prove revenue neutral) and it makes buying stuff in MO a no-go. There is no tax on labor, just materials. New houses would be unaffordable if you add sales tax on materials.

It would be great for my spouse and me. We've paid for our house. We've bought all the cars we want to buy. But we've got four kids and I don't think that, given their current salaries and income potential, they would ever be able to achieve a middle-class lifestyle in MO if they had to add at least 12.5% to everything they buy. Young people can hardly afford rent, health insurance, gas, car insurance, and food.

[o_zarkman44]

The Mo Tax Reform will be revenue neutral. The Show Me Institute has made projections of current tax collections, as well as past average annual tax collections.

We are in an economic down turn. Which means income tax collections are down. So are sales tax collections. The Fair Tax is not intended to make up any revenue shortfalls caused by the recession.
5.11% has been determined to equal current tax collections.
When the economy improves, so will sales tax collections, and so would income tax collections. The fluctuations in revenue would be neutral.

The amount you are saying, 12.5% is inaccurate. Some people have been including the current 4.225% sales tax, and in addition adding the 5.11% Fair Tax rate, plus local sales taxes, which will not change. The only amount of change in the sales tax is moving from the 4.225% to the 5.11%.

So if your current state tax rate is 4.225% and your local sales taxes, county etc are 3.75% the total you are paying now is 7.975%. The Fair tax will raise that sales tax rate .885% to 8.86% and not the 12.5% you mentioned. In your example the costs are overestimated and the revenues are underestimated.

Remember now, the sales tax we pay is taken out of what we have left on our paycheck after state income tax is taken out and then we still pay sales tax on our after tax income.
With the Fair Tax, You keep your entire check and only pay a tax when you make a purchase.

Economist Joseph Haslag, a MU Economics Professor and Executive Vice President of the Show Me Institute has completed a case study comparing neighboring 5 states and their economic growth. Missouri ranks barely above Illinois for GDP and Jobs creation but just about half the growth experienced by Arkansas. There is a completed study by Americans For Prosperity foundation WWW.AFPMO.org that breaks down income demographics. Also there is a Study compiled by the Show Me Institute www.showmeinstitute.org
that refutes the inaccurate figures quoted in your posts.

Look there and then come back and tell me how abolishing the income tax is bad.