Since when did sales taxes become painless?
While I don’t review every receipt I receive for a retail purchase, I feel the sting of escalating sales taxes. Maybe it’s because I’m a Virgo. We have a tough time throwing things away that have sentimental value. But we’re also wise in knowing that small things quickly add up to become huge things.
This is how it is with Proposition P. I support the proposed regional sales tax, because the $31 million in annual revenue it's predicted to create would be divided between local and county parks and Great Rivers Greenway. Some of the cash would go to improving the Gateway Arch Grounds.
I love the Arch. I really like parks, even if I don’t use all of them. They have sentimental value to me.
However, to pass off Prop P as just a meager two cents additional tax on a $10 retail purchase is ridiculous. Those two pennies add up, folks. Keep adding that two cents on every $10 you spend for 20 years, and you get a number that you won’t be pleased with.
Kirkwood residents now pay 8.18 percent in sales taxes. This breaks down as 4.23 percent to the state; 1.45 percent to St. Louis County; 1.25 percent to Kirkwood; and a “special local” tax of 1.25 percent for transportation districts and local attractions.
So for every $10 you spend in Kirkwood, you pay 82 cents in sales taxes. That would skip up to 84 cents if Prop P were to pass.
OK, maybe I can live with that two cents increase. But what will doom Proposition P in many voters’ eyes is the fact that the sales tax is already likely to go up. The state legislature seems determined to drastically cut or eliminate corporate income tax and also trim personal income tax. The lost revenue would be replaced by—you guess it—increases in sales taxes.
The GOP-led Missouri Senate passed a bill last week (along party lines, as usual) that would cut income tax for residents and businesses by three-fourths of one percentage point. However, the state sales tax would jump by 1.5 cents. This would include a half-cent for general revenue. An additional one cent designated for transportation could be added to the state sales tax with voter approval.
At this rate, it won’t be long before many Missourians are paying close to $1 in sales tax for every $10 spent on retail items.
There is also the debate as to whether cutting corporate taxes will actually draw businesses to Missouri or keep them in the Show-Me State instead of moving to tax-friendly (and broke) Kansas. It seems likely that there will be a drop in revenue for the state, although a recent study claims that revenues could actually rise.
I’m not here to debate those issues, though. I think we’ve lost sight on the impact of sales taxes on all residents of the state. A sales tax on a loaf of bread has more impact on a poor person than a wealthy one. All Missourians should be concerned with this disregard for sales tax increases.
We all need to slow down on the escalation of sales taxes and realizes once and for all that “a penny saved is a penny earned.”
Commentary by Alvin Reid