This article first appeared in the St. Louis Beacon, Feb. 4, 2011 - The Missouri Catholic Conference is preparing to go all out to publicize its opposition to the proposal to replace the state's income tax with a sales tax.
But executive director Mike Hoey says the conference's audience is not so much the state Legislature, which is considering the plan, but Missouri's voters -- whom the conference expects to cast a decision on the matter in 2012.
"We need to win the public's opinion on this (because) that's where it's headed," Hoey said in an interview today.
The opposition of the conference, which represents all four archdioceses in the state, has been known for some time. The conference blanketed legislators with papers last session outlining its objections to the tax shift.
In a nutshell, Catholic leaders believe that the poor, the elderly and working-class Missourians would pay higher taxes if the income tax is replaced with a sales tax. Supporters contend the change would lead to more economic development in the state.
This session, the conference is among the first to wage strong opposition to the tax shift, as the Legislature prepares to debate the issue again. Hoey predicts a similar scenario to last session's events -- the so-called "Fair Tax" passes the state House, but dies in the state Senate.
The difference this year, he said, are the nine initiative-petition proposals submitted by the group "Let Voters Decide," which last fall won statewide approval of restrictions on local earnings taxes. The group's chief financial benefactor has been wealthy financier Rex Sinquefield, who opposes earnings taxes and state income taxes.
Hoey believes that one or more of the proposals will likely end up on the 2012 statewide ballot. "I think the 'end game' is the 2012 election," Hoey said.
The conference has yet to decide how it would campaign against a ballot measure. The full-page opposition paper contained in latest issue of the St. Louis Review (first cited today by Firedupmissouri.com) is aimed at "educating Catholics on why (the change) is a bad idea," Hoey said.
Catholics, by the way, are believed to make up about a quarter of Missouri's voters.
Citing the sales-tax plan's moniker "the Fair Tax," Hoey calls it "really the 'Unfair Tax.' "
He questions why Missouri's income tax would be a target, since it is essentially a "flat tax" of 6 percent on most income. Hoey said he fears some Missourians may wrongly believe that the sales tax would replace the federal income tax, which he suspects is the real object of the public's ire.
He also cited critics' claims that, if the change is made, Missourians would flock to purchase major items in neighboring states with lower sales taxes, notably Kansas and Illinois.
In the Review, the conference cites a recent analysis by former state budget director James Moody that the state's sales tax would need to be increased to 15 percent from the current 4 percent (or 4.225 percent, depending on the item or service), to raise as much money as now collected with the state's income tax. Current state budget director Linda Luebbering has offered a similar estimate of a 14 percent sales tax.
"That's a really high tax for lower-income people to pay," Hoey said.
Supporters of the tax change contend the Missouri state sales tax would be much lower, while the initiaitive-petition proposals would cap the new state sales tax at no more than 7 percent. But Hoey says such a limit would likely lead to dramatic state budget cuts, which he says also would particularly harm the disabled, the elderly and the poor.
Hoey acknowledged that the conference is concerned that Catholic agencies would be among those affected, because several receive state money to provide various social-services, such as counseling and foster care. But he said the issue is less which agencies are hurt, and more about the people who would lose services while facing higher taxes.
He also took note of the state's current budget woes, which have lessened largely because of higher revenue from state income taxes. The state's current sales tax collections have largely been flat.
Hoey noted that at least one of the initiative-petition proposals would exempt private-school tuition from the new higher sales tax. "We're positively support of our Catholic schools," he said. "but we're not going to abandon the poor."
For all its concern, the conference has yet to discuss the issue this session with House Speaker Steve Tilley, R-Perryville, and other supporters of the shift to a higher state sales-tax to replace the income tax. Hoey said such discussions were unnecessary: "They know where we are on this."
