Amendment 5 would create approximately 8.5 billion dollars in new sales taxes on goods and services in exchange for eliminating the personal income tax. The state sales tax rate on goods will go up. Some items now exempt will likely become taxable and many services will have sales tax collected for the first time ever if Amendment 5 passes. This could include haircuts, construction work, real estate and many more services. No one knows what items and services will be taxed, nor do we know at what rates, because that would be determined after Amendment 5 passes.

Amendment 5: Do you want to give legislators and lobbyist a blank page to determine what goods and services will have sales tax added or increased over the next 5 years in exchange for reducing or eliminating the income tax?

When asked what new items will have taxes added, Missouri legislators say:

“You will just have to trust us”

In 2021, Missouri legislators passed a 12 cent increase in the state gas tax. This tax was rejected by Missouri voters 3 times

Every year Missouri legislators pass omnibus multi-subject bills that violate Article 3 of the Missouri constitution.

In 2009, Missouri banned mandatory participation in REAL ID to protect the privacy of our citizens. In 2017, the Missouri legislators reversed the ban bowing to pressure from Washington D.C.

Not a good track record to create trust from Missouri voters.

Promoters of Amendment 5 say “Now everyone will pay their fair share.” This is a myth. The largest tax savings go to higher-income households, while many low- and middle-income Missourians would make up the difference through higher sales taxes and other consumption taxes.

A retired banker crunched the numbers and tells us: “A middle-income Missourian earning $65,000/year would face a $535 net tax increase. Older adults and active duty military, whose income is largely exempt from income tax, will have a much steeper tax increase.”

Amendment 5 could boost Missouri to the highest state and local sales tax rate in the nation according to Ray McCarty, president and CEO of Associated Industries of Missouri. He cites a study by The Tax Foundation that compared state and local sales tax rates across the USA.

High sales tax rates will have unintended consequences. Many Missourians will simply go across the border to shop where sales tax rates are lower.

Amendment 5 requires state and local governments to offset tax increases in one area and decrease them in another. Amendment 5 will require your county and local taxing entities to recalculate sales tax and property tax rates - hundreds of different levy combinations into something that meets the requirement of re-balancing sales vs property taxes. This would be an accounting headache that also comes with additional costs for local governments.

A no vote does not mean you don’t want tax reform in Missouri. It does mean that Amendment 5 is a flawed plan with unintended consequences that will hurt more Missouri citizens than it helps.

More on why Amendment 5 is bad policy for Missouri citizens in next week’s article.

Amendments 1, 2, 4 & 5 will be on the August 4th ballot in Missouri’s primary election.