On August 4, Missouri voters will be asked to vote for 8.5 billion in new sales taxes on goods and services in exchange for eliminating the state income tax.

The proponents of Amendment 5 have been deceptive in their advertising.

The first ballot language simply said: “Do you want to modernize the Missouri tax system?” This was intentionally vague and the court did not allow that language.

“The resolution does not sufficiently inform voters of the resolution’s expansion of the General Assembly’s sales and use tax authority and the elimination and suspension of existing constitutional limits on taxation,” Judge Chapman wrote.

Myth: Amendment 5 is a tax cut

Amendment 5 is not a tax cut, it is a tax shift from one source to another. The amount of taxes collected is not reduced. Many Missourians will pay more taxes than now. Government spending is not reduced and there are no provisions to create a smaller or more efficient state government.

Myth: “Amendment 5 will lower property taxes”

While this may be technically true, the advertisement fails to tell the rest of the story. As local sales tax income increases to your non school local governments, the property tax rates must go down ‘a substantially equal amount’. This affects local governments such as police, fire, library, sheriff, road and bridge. It affects all local governments except schools.

Myth: “Amendment 5 will let you keep all of your paycheck”

This is blatantly false. The biggest deduction on your paystub is federal taxes: income, social security and medicare. Those will not go away. Kansas City and St Louis earnings taxes will not go away. If A5 passes, the only tax that will be eliminated from your paycheck is the Missouri tax. This tax ranges from 0 percentage to 4.7 percentage depending on your taxable income, with the top rate of 4.7 percentage applying to income exceeding $9,436.

The majority of Missouri citizens will pay more in sales tax than they currently pay in state income tax.

Myth: Amendment 5 will stimulate the Missouri economy

The amount of taxes taken from Missouri families will remain about the same (or increase) if A5 passes, so there is no additional money per household to spend to create an economic stimulus. Furthermore, the higher sales tax rates will have the unintended consequence of pushing many purchases out of state causing Missouri businesses to lose sales — hurting the Missouri economy.

Myth: Amendment 5 is good for senior citizens

The line is “Amendment 5 will be good for the Missouri economy and a rising tide lifts all ships.” The reality is many seniors pay little or no state income tax, but all seniors will pay more in sales tax. Retirees paid state income tax their entire lives and now when they would owe little state income tax, they must pay higher sales tax. Essentially double taxation. Others who will pay more include active military, veterans, and our lowest income citizens.

Myth: A5 does not suspend the Hancock Amendment

Under the Hancock amendment, Missouri lawmakers can not raise taxes above constitutional limits without a vote of the people. A5 suspends those protections for five years so lawmakers and lobbyists can create new taxes on goods and services. This also shifts more authority to the government and less to the people of Missouri.

Myth: Sales tax will only go from 4.225  percentage to 6  percentage

The amount the rates will go up is not yet determined. The items that will be taxed is to be determined. The items exempted from sales tax is to be determined. The new services that sales tax will be added is to be determined. Last year, Missouri collected 1.6 billion dollars with the 4.225 percentage sales tax rate. If the exact same items are taxed under the new plan, the new sales tax rate would be more than 22 percentage to create the 8.5 billion dollars currently collected from income tax. Add in local sales taxes, TIFFS and special tax rates, and some areas could see a 28  percentage sales tax rate.

Amendment 5 is a tax shift that will have the unintended consequences of making many Missourians pay more in taxes while the top 20  percentage wealthiest will likely pay less taxes.

Vote No on amendment 5

The bill that created Amendment 5 is HJR173. You can read it at house.mo.gov

You can read the entire amendment in your local newspaper or on your county clerks webpage.

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