Missouri considers dropping income tax in favor of broader sales tax

JEFFERSON CITY — The Missouri Senate opened debate Thursday on a bill to replace the state's income tax with a higher and broader sales tax.

The bill would phase out the state income tax over a five-year period, beginning in 2013. In its place, the state sales tax would be expanded to include services and raised to as much as 7 percent.

The measure also would require consumers to pay tax for currently untaxed services such as child care and legal work, and also eliminate dozens of exemptions now in place on items such as food and prescription drugs.

Although it is sponsored by Sen. Chuck Purgason, a Caulfield Republican, its biggest booster is Rex Sinquefield, a retired investor who has poured millions of dollars in recent years into GOP candidates and libertarian causes in Missouri. He also is bankrolling a campaign to reconsider the earnings taxes levied in Kansas City and St. Louis.

Proponents maintain that the tax change would ignite business growth in the state and empower citizens by tying their tax burden to consumption rather than income.

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