Not So Level Playing Field Tax Increase

If you have been following the educational blog posts dealing on the potential veto override of House Bill (HB) 1329, you know that there are many bad aspects that have come to light about the bill. While some people don’t like hearing or seeing it, the Governor nailed it in his veto message of the bill. I think it’s fair to say that most of these elements were not readily apparent when the legislature hastily passed the measure. The rush was ostensibly to create a “level playing field” for Missouri car dealers. Oh yeah, and to help cowardly local governments to take your tax money.

Sure sounded good at the time but recent data shows that most of those who will be taxed retroactively did not purchase their vehicles from out-of-state dealers. Most of us probably agree with the level playing field argument for Missouri car dealers. We certainly want our Missouri car dealers to have the opportunity to be competitive with out-of-state dealers. When the issue came up during session, the thought was that most of the “missed” taxes were the result of out-of-state purchases giving out-of-state dealers some advantage. Now we know better.

Last week, the Governor identified 122,702 purchases that would retroactively be subject to the new tax. Yesterday data was released that shows that of those 122,702 purchases, almost 108,000 of them were purchased from individuals, not out-of-state dealers! So much for the level playing field argument!

The issue with HB1329 certainly demonstrates for all the naysayers that tax policy does matter! The naysayers will quickly find out if HB1329 is overridden that people do understand the importance of tax policy firsthand.

When 89% of the people who purchased cars from another individual since the court decision became final receive their new tax due statement, they will understand tax policy matters. They will not understand that they are part of leveling the playing field because it doesn’t for them. They will understand that if their representative or senator voted to override the Governor on HB1329, that those elected officials raised their taxes!

But what about the “loss” to local governments who “need” the money? They cannot blame the state for any loss of revenue. They can only blame themselves. They have had 3 opportunities to ask their voters to approve a local use tax since the court decision. The local government elected officials who didn’t ask have failed in their duties and have absolutely no right to complain about any lost revenues or to blame anyone but themselves!

HB1329 is not the fix for the problem. Counties and cities should show the necessary leadership and courage to ask their local taxpayers whether or not they want to have a local use tax. Some are doing so but many more are not. This is a vast failure of leadership.

As I said earlier, at the time the bill was passed it may have seemed like a really good thing to do, leveling the playing field and all that. Now that the facts are known, there is no excuse for voting for an override of HB1329.