Author: Jared Fallon

For more information, see www.mofairtax.com 

 HJR 36, The MO Fair Tax plan, is a proposal to restore personal liberty, government transparency and fiscal accountability back into Missouri’s tax code.

It results in a real pay raise for residents, empowers the state’s economic engine and shifts the entire business system from taxation to customers and employees.

Ed Emery’s Fair Tax plan is a reform for the better, and truly seeks to restore Missouri’s competitiveness.

But what exactly is the MO Fair Tax?

HJR 36 seeks to ask the voters of Missouri to decide on a plan to replace the state income tax with a consumption (usage) tax. If put into law, the bill would raise the sales tax by 1.1% and broaden the scope of the tax to include personal and property and taxable services. The Missouri General Assembly would be allowed to make one adjustment to the rate to make it revenue/spending neutral.

Despite Emery’s plan to ensure Missouri’s economic growth, many people are questioning the timing of his proposal.

At a time when layoffs and fears of economic recession are commonplace, why would Missourians want to reform the state’s tax code?

The reason, sadly, is that Missouri is falling behind.

The tax system has become far too bulky and government transparency is wavering. Tax evasion is increasing while illegals avoid contributions. The complex tax code distracts from opportunity and discourages small businesses. Items are taxed every time they are sold, no matter how many times they are purchased and many services are not taxable. The solution? A usage tax that doesn’t fault individuals for working.

A single, revenue-neutral sales tax is the answer.

For proof, consider the Show-Me Institute’s report “Tennessee vs. Missouri: Taxes May Tip the Odds.” It states, “By any economic measure, Missouri dominated Tennessee at the end of World War II. Since then, Tennessee has reported faster economic growth and now has higher per-capita income than Missouri. With continued strong growth, the gap will just keep widening.”

The difference between the two states? Tennessee doesn’t have a state income tax.

“Consider two people with identical characteristics, one in Missouri, the other in Tennessee. Suppose those two people were given identical work opportunities, so that they had access to the same machines and plant surroundings. For one hour of work, each produced the same amount, and was paid $20. Excluding federal taxes, the person in Missouri would take home $18.80 while the person in Tennessee would take home $20. The person in Tennessee will supply more labor because he realizes a higher return for his effort.

The difference in returns applies also to those owning machines, plants, and other equipment. Other things being equal, the after-tax return to capital in Tennessee is higher than in Missouri. Consequently, when deciding where to locate plants and equipment, Tennessee has an advantage. Together, the incentives to locate machines and people in Tennessee can account for why the Tennessee economy is performing better than the Missouri.

This is not to ignore other factors that affect the two states’ economic performance. But the comparison does suggest that tax structure does matters. Perhaps it is time to ask: What tax structure is in Missouri’s best interest?”

The answer is the MO Fair Tax.

Author: Sarah Riordan

Unless you A. don’t have a TV, B. have one but only watch MTV, VH1, or E, C. don’t have a computer, or D. your electric was turned off, you really don’t have an excuse to be oblivious to the fact that California is facing a budget crisis.  Plus, in addition to facing severe financial problems, Gov. Arnold Schwarzenegger is having some trouble getting his budget proposal passed.  So while the California State Senate continues to debate what’s best for the people of California, it is StateSurge’s job to provide you with information about the budget, and legislators in charge of passing or failing it.

In a statement that seems reminiscent of a recent federal bill that had a little something to do with economics, the Republicans seem to be the ones resisting the proposed budget plan. There is one Republican supporting it however, so here’s a brief little tidbit about the lone Republican, and what he has supported in the past.

Dave Cogdill is the lone Republican supporting the governor’s budget plan.  He’s a Senator from the 14th Senate District including the areas of Mariposa, Madera, San Joaquin, Fresno, Tuolumne and Stanislaus.  He has served as the 14^th district’s Senator since 2006, and has been the State Senate Minority Leader since he was voted unanimously to the position in 2008.  Despite his position as minority leader, according to Statesurge’s legislative tracking,  Cogdill is one of the five least effective legislators in California.

According to Cogdill’s own website, he’s not a fan of tax increases and is against increasing the tax burden on Californian’s in a time of economic hardships.  However, the proposed budget includes a number of tax increases for Californians.  This is supposedly the reason why few Republicans are backing the budget plan.

So naturally, the assumption is that Cogdill is well…a RINO. (Republican in name only) However, it seems that both fisically and socially Cogdill has maintained a conservative stance.  He has repeatedly voted against tax increases, and his anti-abortion and anti-homosexual marriage views have been unpopular in California since his 2006 election. 

So, with experience and seemingly strong conservative values, why is Cogdill going against his party and voting for a bill that not a single additional Republican is supporting?  Honestly, at this point, no one really knows.  Perhaps Cogdill believes the budget is reasonable, or perhaps he thinks it’s necessary for the state to pass the bill in order to rescue the California government.

As of today however, we have no clear answer and no idea why Cogdill has been unsuccessful in convincing his fellow Republicans to follow his lead.  Though no Republican Senator has yet agreed with Cogdill, there is talk that Republican State Senator Roy Ashburn who abstained from voting originally, will follow Cogdill’s lead and side with the Democrats. Until more information is released however, we spectators can sit back and wait to see who supports who, if the bill will ever pass, and how California will survive their current budget crunch.  

Author: Sarah Riordan

Reading through President Obama’s economic stimulus bill is no small task.  At 778 pages, it’s bigger than the final Harry Potter book and let’s face it, it’s far less interesting. That’s why others read it, and provide the world with summaries of the document.  So here it is ladies and gentlemen, a one sentence summary of President Obama’s bill: Where’s the change?

That was the only thought that came to mind while sifting through page after page after page of money being thrown at just about everything.  Where’s the change?

It’s true that under the Bush administration there was a lot of spending.  Even die hard Republicans were unhappy with President Bush and all the money being given out.  Republicans who criticized Bush were stating that he was spending like…well…a Democrat. 

So with massive national debt, a struggling economy, and China working as the U.S.’s giant bank, President Obama comes along and promises a change; new policies, new leaders, a better economy, and a change in the amount of spending in Washington.

Yet, after all of those promises were made, President Obama gets into office, and within a month, proposes a piece of legislation that will cost the U.S. an amount that has now reached over 830 billion dollars.  His claim and the claim of Democratic Senators and Congressmen and women everywhere, is that this bill is different because it’s an economic stimulus package.  But is it?

That’s the biggest problem with S.1.  It gives money to every organization that’s near and dear to Democrats, whether or not it will help create jobs and stimulate the economy.  For example, on page nine of the bill there is a section that designates 100 million dollars to go toward school lunch programs.

It’s not that providing school kids with lunch isn’t a worthwhile cause, but as part of an economic stimulus package, it seems out of place. Unfortunately, that theme holds true throughout the bill.  It really does seem more like a budget bill than a stimulus bill.

In the end, the bill that’s supposed to create jobs, really just seems to be a massive list of financial gifts to any organization that Democratic politicians have supported throughout the years. The organizations that receive money range from ACORN to WIC.  Neither of which seem to be particularly crucial in job development. 

It’s not that everything in the bill is terrible, it’s simply that a lot to most of the bill has nothing to do with creating jobs and stimulating the economy. It’s just another bill that will spend billions and billions of dollars and do absolutely nothing to help the current economic struggles we’re facing.  In the end, it’s no different than any spending bill proposed under the Bush administration. Bottom line, the only change that occurred was the name of the party holding office. 

Author: Jared Fallon

US automakers have been falling behind foreign competitors at an increasingly rapid rate over the past few years. Once the Japanese engineering genius Toyota was able to conquer the SUV/Truck market in the states Detroit’s Big Three began to see drastic decreases in sales, customer loyalty, and ever-needed funding for a host of projects. These issues of concern include greatly needed energy-efficient technology research and development (such as hybrid or renewable fuels) and increasing numbers of US employee layoffs, early retirement packages, and decreased healthcare benefits. At a time when the looming financial crisis is threatening the prosperity of the world’s economic growth and a host of US industries, one US legislator is seeking to throw taxpayer money at encouraging people to buy automobiles made within the US.

Representative Louie Gohmert (R-TX) has a bill currently pending in its respective committee as of last Friday “To Amend the Internal Revenue Code of 1986 to allow a one-time, $1,500 credit against income tax for an automobile manufactured in the United States.” H.R.7303’s official title is the “Consumer and Automotive Recovery Act of 2008”. The idea behind the proposal is along the same vein of the massive amounts of government bailouts requested since Mac and Mae, much like the $50 billion in loans Detroit is asking Congress to provide. Louie’s proposal is strong in good-natured intent, but only achieves three primary goals: helping US consumers in the short run, helping ALL automaker companies that manufacture within the US, and offering partial assistance in the preservation of a small percentage of auto manufacturer’s American employees. Furthermore, much like Bush’s stimulus pack, the bill would be funded merely by taking money away from Americans in order to reward the Americans that choose to spend their money on a new vehicle.  

As Ford, GM, and DaimlerChrystler continue to lead the initaive for the proposed bailout one should question the effect such a proposal would have that offers no safeguards for the $1,500 tax credit to be used for the purchase of foreign companies manufacturing in the US. The two plants that come to mind immediately is Toyota’s hyper-green 2,000 employee San Antonio plant or the Japanese company’s 7,000 employee plant located in Georgetown, Kentucky. While Louie’s efforts would help ensure the American workers’ jobs within such plants, it would be counter-intuitive as to the progress and assistance that US auto manufacturers truly are need of in today’s increasingly hostile climate.

At this point, greater economic benefit would be seen by redirecting our collective efforts on helping regain the once-famous Detroit company supremacy companies such as Ford and GM once had. While Gohmert’s idea may be well intended, such policies should be aimed more towards increasing US companies’ research, development, and overall competiveness before they begin supplying unneeded momentum for foreign automakers. 

Author: Jared Fallon

In a recent report conducted by the General Accountability Office (GAO) it was found that roughly two thirds of US corporations found ways to avoid paying federal income taxes between the years 1998 and 2005. Additionally, it was found that 68 percent of foreign companies doing business in the United States partook in the same exercise. The report was initially requested by Senators Byron L. Dorgan (D-ND) and Carl Levin (D-MI). Many people believe that it is unfair for these corporations to avoid such a tax but considering the complexities and time spent on complying, why wouldn’t they?

Despite the fact that the United States is home to one of the friendliest business climates in the world, it also is known to have one of the most complex federal tax codes that can, at times, encourage corporations to spend large sums of money to discover methods of tax evasion, rather than encourage innovation. The US increasingly causes both individuals and corporations to bare this monolithic burden that can, and should be made easier. Amidst the developments and changes that are matched with the newest waves of globalization, the US needs to figure out ways to help it become more welcoming not only for US entrepreneurs but foreign corporations as well. A simplified federal income tax code would help accomplish this and in turn, create more competitive benefits for America.