New Initiative Seeks to Eliminate Sales Tax
ST. LOUIS COUNTY - Two men are running a new political action committee aimed at completely eliminating sales tax in Missouri.
No MO Sales Tax, the initiative started by 52-year-old Lloyd Sloan and 20-year-old Ken Newhouse, has been gaining attention statewide.
The grassroots super-PAC said cutting sales tax would give Missourians more money in their pockets to spend in the state's economy, spurring growth.
"It's fair to ask the question, how are you going to make up the revenue, but when we cut income taxes, no one ever asks that question," Sloan said. "How come, we can cut the income taxes and everyone says we'll just grow our way out of it? Why can't we just grow our way out of it with the sales tax?"
Sloan and Newhouse said the idea came after Newhouse spent the first part of his summer in Oregon, a state with no sales tax. The two said they saw a system that was working for a comparable-sized state, and thought they could make the same system work in Missouri.
Skeptics on both sides of the political spectrum have disagreed with Sloan and Newhouse, but the pair said, with time, it could be a solution that pleases both parties.
"Democrats are supposed to be for the poor, Republicans are supposed to be for tax cuts. I'm doing both and they both oppose it," Sloan said.
Jefferson City's administrator said taking sales tax out of the equation would eliminate a quarter, up to a third in some cities, of usable revenue for city government.
"An economist would say, if you give tax cuts, particularly at low levels, then it generates more economic activity," said Nathan Nickolaus. "The problem is that, for local governments, the way we translate more economic activity into tax money is sales tax."
Sloan and Newhouse said reducing the sales tax one percent at a time could prove the idea works. Combined with possible cuts in spending or eliminations of TIF tax breaks, they said, the economy will, in fact, grow.
Also opposing No MO Sales Tax are supporters of the fair tax plan. In this initiative, several taxes would be eliminated, and instead replaced with a national blanket sales tax rate of 23 percent.
Sloan and Newhouse said, although the fair tax plan calls for cutting some taxes, it would inevitably further damage the economy.
"They call it revenue-neutral," Newhouse said. "But the one thing they fail to do is cut spending. They don't cut the size of government, they don't try to solve any of that problem."
Sloan and Newhouse hope to schedule a debate with a state legislator on the fair tax and their own initiative this fall. Until then, they said, they would continue to get their name and message out to Missourians statewide.