Adam Watson (00:00) Welcome back to Simplify in the State, the podcast where we break down politics so you don’t have to try to figure out why sales tax could go up by a hefty amount. As always, I’m Adam Watson.
Nicholas Perrin (00:10) I’m Nicholas Perrin.
Luciano (00:11) I’m Luciano Perman.
Drew (00:12) I’m Drew Garfinkel.
Adam Watson (00:13) Before we start, please rate us and follow the podcast wherever you are listening, and share it with anyone you think would enjoy it, like your prom date. All right. So today we’re going to be discussing the potential increase in sales tax in Missouri. Basically, there’s a bill that passed in the state Senate to eliminate income tax in Missouri, but to make up the deficit in the budget that would be caused, they want to increase sales tax revenue on various things. So it passed the Senate, going back to the House for any potential modifications they have, and then it goes to the governor’s desk. And then if it passes all that stuff, then there will be a vote in the election in November on whether to adopt this constitutional amendment. So first impressions from you guys — what do you think?
Luciano (01:02) I think this is the consequence of what happens when people in power have unchecked power, and they can just do what they want with it. But I think — I feel like a lot of what’s happening right now, especially even with the sales tax stuff and the governor’s office and the state Senate and the state House — because there’s no checked power, because it is Republican majorities, I feel like they’re just doing whatever they want and they’re getting away with it. Again, this is going to disproportionately affect lower-income people rather than people who make a lot more money. And I think that sales tax is going to really affect the cost of living in Missouri, and that’s a net negative. I think everyone is very cognizant of that in the Missouri state government, and they don’t care because it just enriches all of their friends. And I think that’s really concerning to me. And I think it, for one of many things, drives business out of St. Louis — not just out of St. Louis, but out of a lot of Missouri — because people, especially on the borders, will go to Kansas or Illinois or Iowa or Arkansas because goods will be cheaper, and they’ll buy stuff there, taking business out of Missouri. And it’s just bad. It’s a bad idea, and it’s deeply worrying. So that’s my —
Drew (02:14) I’m feeling the same as Luciano. It’s going to benefit the wealthiest people most, while kind of leaving the lower and even the middle class behind.
Adam Watson (02:24) That’s super —
Nicholas Perrin (02:26) I pretty much thought the same thing when I first heard about this. I immediately thought, “Why are we doing this?” Because they reasoned that they wanted to make Missouri a more competitive state to attract businesses, whatever, and I guess I can see the logic in that. But I think overall it’s worse than just keeping sales taxes the same, because to stimulate the economy, you want people to go out and exchange their money for goods, and making the prices of goods higher by increasing sales taxes can do the opposite. So I just don’t understand the logic in that.
Luciano (03:01) I think it’s just another scheme. I think whatever the Missouri government wants to do, I feel like they can do, because again, it’s Republican. I don’t believe its super majorities in the state Senate and state House, but it’s definitely a concerning amount — if the governor and people in power can do whatever they want without any major repercussions because of the very comfortable majorities they have. And I think it’s not like — yeah, I think it will drive business out of Missouri and is ultimately a bad thing. And I think the only people it benefits are the wealthiest 1% of Missourians, which is moronic. I think it’s really dumb. And I think it’s not necessarily just a wholly partisan issue, because three GOP state senators voted against the resolution, which I think is really good. But I think it is really just an issue of power. I think it’s those who are super rich and want to keep all their rich friends — who pay for their political campaigns — happy. Then they’ll sign onto this tax, and they’ll sell it to the voters as a tax cut, even though it actually increases taxes. And then they’ll just make their friends richer and it’ll be worse for everybody, because good governance inherently relies on checks and balances on power, and Missouri doesn’t have that right now. And again, deeply, deeply concerning. So yeah, I agree with everything Nicholas said. It’s very bad.
Adam Watson (04:19) Yeah. Yeah, I agree. I mean, yeah, they have a supermajority in both chambers. And I think that grants them the ability to sort of ignore what the other side has to say. I think I agree. And I definitely agree with you on that. I think that Missouri is in a situation where there is no political check on the Republicans. And I think there is no need for them to be competitive, and there is no need for them to be proactive in making policies that would benefit the majority of people in the state. Because I mean, the majority of people in the state are not only not going to benefit from this elimination of income tax, but are going to be harmed by this increase in sales tax. And yeah, I agree. I think this is a blatant example of people in power — and in this case Republicans — making life better for their rich friends and for possibly themselves, depending upon what their net worth is, and again making life difficult for working and average Missourians.
Drew (05:19) So, Adam, you kind of touched on this just now, but how would you say a normal citizen is going to react to these changes? Because we’ve kind of gone over how this would only benefit the top 1%. What do you think the outcry will be from people like us?
Adam Watson (05:36) Well, I mean, I think if it passed — I think there are going to be two outcries. During the campaign phase, I think that, depending upon what kind of information is presented, people are going to be upset by the potential increase in sales tax. If it passes, income tax will decrease, yes. But sales tax is going to increase. And so what that means is basically everything you buy is going to cost more, as opposed to it being just a flat rate. So I feel like there’s going to be a little more concern and tightening of belts. Because right now, just in Clayton, the sales tax is about 9% — a little over 9% — and that’s when you factor the Missouri sales tax, the county sales tax, the Clayton sales tax, and all that stuff together. It comes out to about 9%. So this bill could raise the state sales tax by about 8%, from about 3% now to about 11%. So that could see us in the teens in terms of what our sales tax is, which I think would definitely — and that’s just in Clayton. There are places outside of Clayton where they have a higher local sales tax than the state. So there will just be an overall increase in the cost of goods, which again is going to hurt middle-class and lower-class Missourians significantly more than it’s going to hurt the top 1% of Missourians who are very rich.
Luciano (07:06) Yeah. I think also, this might be one of those situations where the Republicans are screwing over their own base. And I think that might have the potential to hurt them in the midterms a lot more. Because there are a couple of Missouri Senate seats up for election this year —
Adam Watson (07:16) I think a good chunk of the House seats, if not all of them, are up for reelection. I have to check that.
Luciano (07:33) Yeah. And then I think — this is just the optimist in me — but I think hopefully people realize that these people are screwing them over. I mean, again, we have seen this before, especially in deep-red areas in Missouri. In Festus, I think their entire city council — all five members who voted to approve a data center — were all voted out a couple of weeks ago.
Adam Watson (07:59) Yeah, I saw that.
Luciano (08:00) There is massive pushback. If you do dumb things — play stupid games, win stupid prizes. If the mask slips and you lose your rural base on economic issues, then what does that mean? Does that mean people get primaried by people further to the right, or more toward the center? Democrats, maybe? I mean, Democrats are running people in like 96% of races, which is awesome. But I think it has to be backed up by the fact that this has the potential to be a rallying cry for not just moderate fiscal conservatives, but also moderate Republicans — and like Democrats — who have a real opportunity to win this stuff. And you could see them maybe make some gains and chip away. That’s the best-case scenario. But I think what’s likely to happen is that a couple of seats will get challenged, people are going to realize this is really screwing over the economy, and the resolution will hopefully fail. But I think even if it does pass, I feel like the state government will get a big slap in the face.
Adam Watson (09:14) Yeah, I agree here. I mean, I am more pessimistic about Democrats’ chances in Missouri. I feel like we’ve sort of been down this road every single election — we think, “The Republicans just did this really bad thing, I feel like we have a good chance of at least making a dent in the Republican presence here in Missouri.” And then ultimately it comes to maybe we win one or two seats, but usually that’s the extent of it.
Yeah, I agree. I mean, I feel like Republicans in Missouri are frequently going against what the majority of people want. Close to 50% of people said they oppose this restructuring of the tax system — eliminating the income tax and increasing sales tax. And we also saw it with other things. We saw it with what they did with Proposition 3 after it passed with the abortion measure — the Republicans just basically said, “We’re going to ignore that. We’re going to override the voters.” And now they’re doing a bunch of stuff. Overall, I think we see the Republicans in Jefferson City frequently ignore what people want and just sort of do what they want, or what their richer constituents want. And I mean, we could see some blowback for them politically. All of the Missouri House seats are up for reelection, and 17 Senate seats are up for reelection in 2026. And this income tax thing could be a real way to drive anti-Republican turnout in Missouri. Again, I’m more pessimistic about how much we can accomplish. But I mean, as you said, with the sheer amount of Democratic candidates we’ve got across Missouri, I think there’s a good chance to at least make some kind of dent in the Republicans’ House and Senate presence.
Luciano (10:55) That’s the hope. That is the big hope. It’s really a question of how effectively this issue is communicated by Democrats and how poorly Republicans handle it. And I think those two questions determine the outcomes and the impacts. And I can only hope for the best. Yeah.
Adam Watson (10:58) Yeah. Before we wrap up, I think, speaking about how this can impact high schoolers — I mean, sales tax is kind of the only tax that affects high schoolers. Unless you have a job and stuff like that. But I feel like it’s the main tax that affects high schoolers when we go to buy things. And this could see us paying more. I’d love to hear your guys’ thoughts on how it will affect us.
Drew (11:41) Yeah, I don’t have a job. So if I go buy something, obviously, I’m not going to have an income to get taxed, so that’s not going to benefit me. But when I do buy something, higher taxes on that will mean I will be feeling it more.
Luciano (11:57) Yeah. I think it might be the one thing where young people are like, “Hey, my Twix bar costs like 5% more than it did.” I think cost is one of the things that a lot of high schoolers are more aware of — especially gas. I know with the whole Hubble balloon, Iran and everything, I think it’s just been making gas go up and up. And I’m terrified to go to the gas station now. But I think it’s one of those things that a lot of people are very conscious about. I think a raised tax will make a lot of young people who are just about to vote, or who can vote, really angry. And I think that’s not a very good thing.
Adam Watson (12:32) Yeah. Yeah, I shed a tear every time I go to the gas station now.
Luciano (12:37) Every day — I’m dreading it so bad right now. I’m on like probably a quarter of a tank, and it’s not good at all.
Maybe the sales tax leads to more people biking, which leads to bike lanes.
Adam Watson (12:51) I mean, I think someone from the Republican side said that a gas tax would be the one thing they would not increase any taxes on — like that was politically off the table for them.
Luciano (13:01) Yeah, that makes sense, but I feel like — my keys, how is that gonna do anything?
Nicholas Perrin (13:04) So I was looking at this one article, and they mentioned a poll about Missourians opposing the switch from income to sales tax, 49% to 37%. But when they heard a whole bunch of arguments about why that would be a bad idea, the article doesn’t say if they were presented with any arguments against the opposition; anyway, they shifted to 75% opposition to 18%. So I thought that was pretty interesting.
Luciano (13:33) Mmm.
Nicholas Perrin (13:34) I think that’s a good note to leave off on.
Adam Watson (13:34) Yeah. Yeah, I agree. All right. Thank you for listening to this episode of Simplify in the State. We’ll be back next time with our next episode. Until then, make sure you follow the podcast — make sure you do all that awesome stuff. Make sure to follow us on Instagram. That’d be really awesome. And then we’ll talk to you guys next time.
Music Attribution: “The World Is Ours” by Zane Little, used with permission, courtesy of freemusicarchive.org.
