Essay on Fair Tax: Avoidance of Taxes

Essay on Fair Tax: Avoidance of Taxes

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PA 8720 - “Fair Tax” Policy Analysis

John Maynard Keynes stated that “the avoidance of taxes is the only intellectual pursuit that carries any reward,” (Waters, 2011). In Missouri, while seeking to avoid an income tax, advocates for the “Fair Tax” have seemingly presented a proposal that is the antithesis of the pursuit Keynes deems worthy. They are proposing a constitutional amendment that would impose a sales tax that no Missourian could avoid. The “Fair Tax” would cost everyone, no matter their income level and even have its greatest impact on the most vulnerable among us. Even as a tax of this type would expand the tax base, the repercussions to the taxpayers, the state budget, and the state economy would present hurdles too high to conquer.
Missourians are facing a tough fiscal environment. They are enduring a slow economic recovery and attempting to overcome a nearly six percent rate of unemployment (DLIR, 2013). If a “Fair Tax” is implemented during this time of fiscal uncertainty, Missouri will be at risk of losing up to $1.5 billion in revenue while increasing its operating costs by $12.8 million (Schweich, 2011). It will also leave Missourians at risk of a reduction in personal funds available for expenditures and could cause a loss in state services.
According to a report released by the Missouri Budget Project ("Four new “mega," 2011), Missouri could suffer a $2.5 billion shortfall if the constitutional amendment were to pass. Totaling roughly one-third of the state’s general revenue, funding to governmental departments and the critical services they provide would be slashed significantly. The report suggests that funding could be cut by the following: $868 million for public schools, $465.5 million for social serv...


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...ections Division. (2012). Constitutional amendment to article x, relating to income, earnings and sales taxes, version 12, 2012-075. Retrieved from website: http://www.sos.mo.gov/elections/2012petitions/2012-075.asp

Moody, J. (2011). Retrieved from http://jamesrmoody.com/fileshare/January 24 State Auditor submission.pdf

Rubin, I. (2010). The politics of public budgeting. (6th ed., p. 50). Washington, DC: CQ Press.


Schweich, T. Missouri State Auditor's Office, (2011). Fiscal note (11-63). Retrieved from website: http://www.auditor.mo.gov/notes/11-63.pdf

Waters, Henry J., I., II. (2011, January 11). Fair tax. Columbia Daily Tribune. Retrieved from http://search.proquest.com/docview/835190115?accountid=14576

Waters, Henry J., I., II. (2011, February 15). ‘Fair tax’. Columbia Daily Tribune. Retrieved from http://search.proquest.com/docview/851765998?accountid=14576

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