TAX JUSTICE FOR A HEALTHY MISSOURI
CANDIDATE SURVEY
Report on Results of Candidate 2004 Survey

All candidates for Governor, Lt. Governor, State Senate and State Representative in the August 2004 Primary Election were surveyed. Candidates were asked their position on five important tax issues. The answers of the candidates who were elected in November 2004 are given here.

These are the questions posed to the candidates. They were asked to answer "Yes" or "No" and to give comments if they wished.

1. Missouri's state tax system does not produce sufficient revenue to meet citizens' needs. Stagnant state operating revenues during the last three years (about $6.2 billion for FY 2004) have resulted in cuts to K-12 and higher education funding, Medicaid, health services, disease prevention and other important programs. From FY02?FY05, we have had over $500 million in cuts from Social Services programs and over $85 million from Mental Health. The school equity formula will be underfunded in FY 2005 by roughly $600 million, and expert testimony before the legislature indicates that even at full funding, the state is roughly $900 million below funding adequate to meet state and federal requirements.

Missouri's individual income tax structure is outdated. The brackets are graduated only up to $9,000. Above that amount, all taxable income is taxed at the same 6 percent rate. The $9,000 figure was set in 1931. Brackets and rates were set in 1972. (An income of $9,000 in 1931 is equivalent to an income of $543,000 in 2002.)

Will you support a restructuring of our Individual Income Tax to make it more equitable and more productive?

All Candidates in the August Primary Who Responded:
YES - 87.5%; NO - 10.6%; Uncertain - 1.9%

CANDIDATES ELECTED IN NOVEMBER 2004:
Senate
YES:
Timothy P. Green (D) #13;
Michael R. Gibbons (R) #15

House of Representatives
YES:
Wayne J. Henke (D) #11
Kate Meiners (D) #46
Michael R. Brown (D) #50
Curt Dougherty (D) #53
Jeanette Mott Oxford (D) #59
Rachel Storch (D) #64
David Sater (R) #68
Gina Walsh (D) #69
Barbara Fraser (D) #83
Jeff Wagener (D) #85
Jack Jackson (R) #89
Brad Robinson (D) #107
Tom Villa (D) #108
Sara Lampe (D) #138
Bruce Wooley (D) #159

NO:
Bruce Darby (R) #3

?:
David Sater (R) #68

2. In lean times, Missouri can't raise taxes to increase revenue and meet needs due to the restrictions of the "Hancock" Amendment." In flush times, under Hancock, "excess state revenue" must be refunded to some tax payers (only income tax payers get a refund). A constitutional amendment that amends Hancock and creates a "Revenue Stabilization Fund" has been proposed (SJR 27, 2004 Session). Instead of distributing excess funds to taxpayers during a given fiscal year, these funds would be deposited in the Revenue Stabilization Fund. In years of a fiscal shortfall, the General Assembly may make use of the revenue in this Fund as necessary.

Will you support placing a constitutional amendment on the ballot to create such a Revenue Stabilization Fund?

All Candidates in the August Primary Who Responded: Ê
YES- 74%; NO - 26%

CANDIDATES ELECTED IN NOVEMBER 2004:
Senate
YES: Timothy P. Green (D) #13
NO: Michael R. Gibbons (R) #15

House of Representatives
YES:
Wayne J. Henke (D) #11
Kate Meiners (D) #46
Michael R. Brown (D) #50
Curt Dougherty (D) #53
Jeanette Mott Oxford (D) #59
Rachel Storch (D) #64
David Sater (R) #68
Gina Walsh (D) #69
Barbara Fraser (D) #83
Jeff Wagener (D) #85
Brad Robinson (D) #107
Tom Villa (D) #108
Sara Lampe (D) #138
Bruce Wooley (D) #159

NO:
Bruce Darby (R) #3
David Sater (R) #68
Jack Jackson (R) #89

3. Legislation has been proposed for the past two years to close state corporate income tax loopholes to raise a modest amount of additional revenue and increase the fairness of our tax system. Ninety of Missouri's biggest corporations - those with $50 million in taxable income - paid no state corporate taxes in 2002, while more than 16,000 of the state's most profitable corporations paid less in taxes than the average Missourian. Missouri ranks last among all the states in the amount of state corporate income tax produced per capita.

Examples of the "loopholes" are: (1) the "Geoffrey Loophole," allows corporations to transfer profits to an out-of-state "passive investment company" to avoid paying Missouri taxes. Closing this loophole would raise $15 million. (2) The "Yacht Loophole," allows luxury boats weighing over five tons to be registered with the U.S. Coast Guard to avoid paying Missouri taxes. Owners of smaller boats are required to pay the full tax. Closing this tax loophole would raise $4.2 million. (3) The "Timely Filing Discount for Withholding " law allows Missouri corporations to receive a discount for sending the withholding taxes they collect from employees to the state. Missouri is the only state that provides this discount. Eliminating this discount would raise $18.4 million.

Will you support legislation to close corporate income tax loopholes?

All Candidates in the August Primary Who Responded:
YES - 93.3%; NO - 4.8%; Uncertain - .9%; No answer - .9%

CANDIDATES ELECTED IN NOVEMBER 2004: (All said YES)
Senate
YES:
Timothy P. Green (D) #13;
Michael R. Gibbons (R) #15

House of Representatives
YES:
Bruce Darby (R) #3
Wayne J. Henke (D) #11
Kate Meiners (D) #46
Michael R. Brown (D) #50
Curt Dougherty (D) #53
Jeanette Mott Oxford (D) #59
Rachel Storch (D) #64
David Sater (R) #68
Gina Walsh (D) #69
Barbara Fraser (D) #83
Jeff Wagener (D) #85
Jack Jackson (R) #89
Brad Robinson (D) #107
Tom Villa (D) #108
Sara Lampe (D) #138
Bruce Wooley (D) #159

4. In 1997, the General Assembly eliminated the state's three cents general sales tax on food. The special state sales taxes of 1.225 cents still remain on food (1 cent, education; 1/10 cent, parks & soils; 1/8 cent, conservation). But in many of our communities, Missourians are paying over 5 cents per dollar on food purchases because of local sales taxes. The tax on food, a necessity for life, is the most regressive of all our taxes.

It has been proposed that Missouri exempt food from local sales taxes and replace the lost revenue to local governments. One way would be the creation of a "Local Revenue Replacement Trust Fund" with revenue raised for it through a reduction in the federal income tax deduction allowed on state individual income tax returns. On federal income tax returns, sales tax is not deductible. But taxpayers can deduct state income tax on their federal income tax returns. Analysis has shown that this food tax proposal would not cause a tax increase for anyone.

Will you support legislation as described above or some other responsible method that would exempt food from local sales tax and replace revenue lost from the exemption to local governments?

All Candidates in the August Primary Who Responded:
YES - 75%; NO - 15.4%; Uncertain ? - 5.8%; No answer - 3.8%

CANDIDATES ELECTED IN NOVEMBER 2004:
SenateÊÊÊ
YES: Timothy P. Green (D) #13;
NO: ÊMichael R. Gibbons (R) #15

House of Representatives
YES:
Bruce Darby (R) #3
Wayne J. Henke (D) #11
Kate Meiners (D) #46
Michael R. Brown (D) #50
Jeanette Mott Oxford (D) #59
Rachel Storch (D) #64
Gina Walsh (D) #69
Barbara Fraser (D) #83
Jack Jackson (R) #89
Brad Robinson (D) #107
Tom Villa (D) #108
Sara Lampe (D) #138
Bruce Wooley (D) #159

NO:
Curt Dougherty (D) #53
David Sater (R) #68

?:
Jeff Wagener (D) #85

5. When people spend money, they buy goods (i.e., furniture, cars) and services (i.e., car repairs, accountant services). Currently the Missouri sales and use tax mostly applies to goods but not to services. Since goods are a shrinking part of the American economy and services are a growing part, Missouri's failure to tax services means we don't benefit from this growing source of revenue. If we continue to tax only goods, an increase in the sales tax rate would be needed repeatedly to bring in the same amount of revenue as before.

Sales tax places the greatest burden on low, middle and fixed income taxpayers. It is NOT based on the ability to pay. In Missouri sales tax rates have been growing rapidly at the local level, with the highest total rate now at 8.725 cents per dollar. Taxing services that are used more by higher-income persons is one way to make sales tax a little more equitable, as well as more productive. It can also serve to prevent an increase in sales tax rates when additional revenue is needed. Basic services, such as medical services and utility services, would be exempted.

Will you support legislation to apply sales tax to services that are used mainly by higher-income persons, with an exemption for certain basic services?


All Candidates in the August Primary Who Responded:
Yes - 59%; No - 29%; Uncertain - 11.5%; No answer - .9%

CANDIDATES ELECTED IN NOVEMBER 2004:
Senate
YES: Timothy P. Green (D) #13;
NO: Michael R. Gibbons (R) #15

House of Representatives
YES:
Bruce Darby (R) #3
Michael R. Brown (D) #50
Curt Dougherty (D) #53
Jeanette Mott Oxford (D) #59
Gina Walsh (D) #69
Tom Villa (D) #108
ÊSara Lampe (D) #138

NO:
David Sater (R) #68
Jack Jackson (R) #89

?:
Wayne J. Henke (D) #11
Kate Meiners (D) #46
Rachel Storch (D) #64
Barbara Fraser (D) #83
Jeff Wagener (D) #85
Brad Robinson (D) #107
Bruce Wooley (D) #159

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