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Good Riddance, for Now, to Bad Idea on Swapping Income Taxes for Much Higher Sales Taxes

Say goodbye, for now, to multimillionaire Rex Sinquefield’s biggest bad idea.

A judge’s ruling has all but wiped out the chance that Sinquefield’s radical tax restructuring proposal for Missouri will appear on the statewide ballot in November.

Sinquefield has invested $2.5 million on an attempt to get voters to jettison the state’s income tax and replace it with a greatly expanded sales tax.

It’s a far-out idea that would force Missourians to pay much more for groceries, homes and everything in between, while sparing wealthy citizens the need to pay income taxes. When Sinquefield’s hefty campaign contributions couldn’t bring him enough votes in the legislature to make the change, he turned to Missouri’s initiative petition process.

Cole County Circuit Judge Patricia Joyce pulled no punches in an opinion that shines a harsh light on Sinquefield’s proposal and also Missouri’s political apparatus. She pronounced the secretary of state’s ballot summary to be flawed, and the Missouri auditor’s fiscal note even more so.

Secretary of State Robin Carnahan’s ballot summary informs voters that the initiative would eliminate individual and corporate income and earnings taxes, and require the legislature to replace them with an expanded sales tax. But, as Joyce correctly noted, a ballot initiative can’t require the legislature to do anything. She called the statement “insufficient and unfair.”

The judge had harsher words for Auditor Tom Schweich’s analysis and summary of the effect that Sinquefield’s petition could be expected to have on state finances.

Schweich estimated that, should the measure be enacted, state revenue could decrease by as much as $1.5 billion, or increase by up to $300 million.

But Joyce’s ruling accuses Schweich of placing too much stock in the testimony of a non-credible “expert” aligned with Sinquefield’s paid staff; of failing to inform voters of the magnitude of the potential financial damage should the initiative pass; and of presenting a deceptively rosy best-case scenario.

Joyce’s ruling declares Schweich’s work to be “insufficient, unfair (and) likely to deceive petition signers and voters,” and orders a rewrite.

As the judge pointed out, all that is known for sure about Sinquefield’s proposal is that Missouri would stand to lose $7.5 billion in income tax revenue.

There is no way to ensure through the petition process that the legislature will replace those funds.

Schweich has said he plans to appeal the ruling. But even Sinquefield’s camp concedes that the push is over for this election cycle.

That is for the best. Missouri’s tax structure could certainly use updating, but that should be done through thoughtful deliberation in the legislature, not through the petition process.

It’s true that we’ve seen little in the way of thoughtful deliberation from the legislature of late, much less an indication that the body is capable of wholesale tax reform. But that’s a situation that Missourians can — and should — begin to change at the ballot box this November.

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