Stacking Taxes

April 29, 2010 05:45 AM

"Socialism is coming!"

The radio-television personality, Glenn Beck, makes that statement. Beck offers that fusion conclusion of entertainment and information after the audio replay of ACORN's CEO Bertha Lewis saying, “If you are young, Democratic and a socialist, you are okay with me."

Socialism is coupled with taxation. If you understand that taxes take wealth from you and re-distribute what you have earned through work, savings and investments to others who did not, then you understand the coupling.

The citizens of Missouri believe that a degree of taxation is necessary and have empowered our part-time legislature, through the Missouri Constitution, to grant Missouri municipalities the ability to tax their citizens. These taxes include a local use tax, a general operating levy, a health, solid waste and museum levy, and a municipal utility gross receipts tax to name just four of the 19 categories.

Is this ability to tax meant to be limited? This is something every tax-paying Missouri citizen should ask. Answers differ, and the various arguments expose perspectives on taxation and the size and scope of government.

According to the Missouri Constitution, the limitation on local tax rates is “one dollar on the hundred dollars assessed valuation.” Apparently, municipalities in conjunction with the state Department of Revenue, take the view that tax greed is good! They maintain that as long as no single general revenue sales tax exceeds the one percent limitation, then multiples of taxes (tax-stacking) are acceptable, even if the cumulative total exceeds or is equal to one-percent.

The limitations encoded in our statutes are 1/2 of one-percent, 7/8 of one-percent or one-percent "if a majority of voters approve.” Pick one, and only one, is the clear, strict intent. Most Missourians would pick the smallest rate. After all, it is our wealth and wages, not the city or state governments.

The Farmington attorney, Tom Burcham, was not a citizens' hero when he sued several small cities for “tax stacking.” Burcham excluded his own city, for which he served as the city attorney. However, he exposed the advocates for more and larger government. These advocates are elected or hired by municipalites who intend an unlimited, multiple and enlarging tax-take. These advocates of bigger and better local government--dare we call them socialists--ignore the singular adjective “a” before the words “sales tax” in the authorizing Missouri statutes for a political subdivision. In the Circuit Court of Barry County, Judge Wiley stated, “A common sense reading of the statute is that the City may impose a sales tax of one-half, seven-eights, or one percent, and not a sales tax of two, three or four percent, or higher." [Penberthy v. City of Purdy.]

The City of Mount Vernon's administrator, John Rice, on advice of counsel, encouraged the eight alderman and mayor to replace a second half-cent capital improvement sales tax and convince a majority of citizens to adopt, instead, a half-cent transportation tax. That "revenue-netural category transfer" allowed the pending action of Burcham against the city to stand down. It cost the citizens $4,000 in ballot expenses. Mount Vernon citizens now pay both a half cent capital improvements tax and a half cent transportation tax.

The sources used to justify additional tax-takes beyond the common-sense reading of the statutes are interesting. A June 14, 1999 letter from a Technical Support Section clerk of the Missouri Department of Revenue's Tax Administration Bureau addressed to the St Joseph International Association of Fire Fighters includes this line: "There is no limit to the number of taxes that may be imposed under both section 94.500 and 94.577.” The clerk who wrote that letter, Sharon Wilson, cannot be found.

Even if she existed, if cities were eager to take more “no limit” taxes from their citizens, would getting permission from the state tax collection agency be that surprising? It appears the fox is guarding the hen house.

Missouri State Representative Tom Jones (Eureka) has filed HB 1442 to “clear up” the practice of Missouri municipalities' multiple taxes. However, State Senator Gary Nodler (Joplin) offered an amendment that seems to cloud the issue. It appears to protect the practice of tax stacking.

Whatever the proclivities of state taxing agents and their supporters in the legislature, the people of Missouri ought to speak up. Let me say it clear and loud, "Read my lips, no new taxes!”

Rabbi DF Eukel, is the host of the Internet talk radio broadcast, Ramble & Rumble with Rabbi. Rabbi Eukel lives with his wife Dee in Mount Vernon, Missouri.

Reader Comments (3)

how interesting- states who have no state income tax or rely on sales tax for revenue are raising the FEDERAL taxes of their citizens by BILLIONS... doesn't sound like the fantasy solution to tax problems after all. http://www.commondreams.org/newswire/2010/04/12-2 What is needed is, quite simply, higher income tax until unemployment goes down, then let the new rates expire. It would be simple to implement. You could always relax taxes for businesses to draw the attention of businesses. Oh yeah, we're already doing that. That's why IBM has opened an operation in Columbia. Try again.

6/18/2010 2:12:19 PM Michael salmons

"Stacking Taxes" should bring the quintessential question of "Who decides and who stands for the rights of citizens?" to every Missourian. How does a clerk's interpretation in favor of stacking taxes overrule the clear findings of the Barry County Circuit Court? (Penberthy V City of Purdy) Missourians need to be aware of the MO Dept. of Revenue's Administration's statement, "There is NO LIMIT to the number of taxes that may be imposed under both section 94.500 and 94.577" With the budgetary shortfall throughout Missouri, is it any surprise that any and all forms of taxation can be and are being used to collect the lost revenues? Wake up, Missouri. Our tax system is in dire need of reform Instead of raising taxes to make up for lost revenue, Missouri could with the passage of HJR56 be competing for businesses forced to relocate to states with favorable tax codes. We could be growing our city and state revenue base by the passage of a law that would end the personal and corporate income tax over a period of five years. According to ALEC (American Legislative Exchange Council)Issue Alert,Mr. 17, 2010,whose research is available in Rich States, Poor States, "During the past ten years, if Missouri had just caught up with the average of the states with no income tax, the average Missouri resident's income would be more than $12,000 higher." Any drive through the heartland Missouri will reward the traveler with the pathetic sight of town after town's main-streets showing empty shops, "For Rent" and "For Sale" signs in once prosperous communities. This is unacceptable and inexcusable when a tax code change as proposed by the Missouri Jobs and Prosperity Act could bring jobs and people to Missouri. According to the alert, "Over the past decade the ten states with the lowest state corporate income tax rates had nearly 18 percent job growth..In addition, personalincomegrew by morethan 82 percent in the low-corporate-income tax states, verses less than 58 perent in the high income tax states. ..States with low corporate tax rates saw their populations growmorethan twice as fast as the states with high corporate taxes." The ALEC Issue Alert is only one in hundreds of research papers available, all of which demonstrate the adverse affect of the personal and corporate income tax on the growth of state economies. So, why are our legislators insisting on holding onto the out-dated, economic depressing tax now saddling Missourians with a future of more job losses, missed opportunities as businesses go elswhere (Tenn. being one state that garners jobs because of their low tax rates - jobs that could have been providing Missourians with a future.).Why do our legislators not pass HJR56? They could. There is still time to request HJR56 be put on the Perfection Calender and brought to the people in Nov. for a vote. What will it take to give Missourians the opportunity to be heard in the polls on this issue? Your voice. Get involved and demand tax policy that is fair, simple and transparent. Support HB1442. Speak up or be prepaired to open your wallets even further than they now are. But don't be surprised if at some date if that wallet is empty. Without jobs there is no prosperity. Without citizens willing to stand up and demand the end of these socialistic policies that ignore minor details such as the "a" before the words "sales Tax", we will only get more of the same.

4/30/2010 12:45:31 PM Beverly Martin

Thank you for your insightful analysis...Socialism is coming? Socialism is already here!

4/30/2010 10:52:59 AM jeannie deangelis

Municipalities take the view that tax greed is good! They maintain that as long as no single general revenue sales tax exceeds the limitation, then multiples of taxes are acceptable.