Blunt, McCaskill propose changes in state tax structure

JEFFERSON CITY, Mo. -- In the last two years, Missouri voters have rejected three statewide ballot proposals to raise taxes. Repeated calls by Gov. Bob Holden for higher taxes, mostly on smokers and casinos, during the same period fell on deaf ears in the Republican-led legislature.

Given the anti-tax mood in Missouri, it is no surprise State Auditor Claire McCaskill and Secretary of State Matt Blunt have vehemently stated their opposition to tax increases. The two gubernatorial candidates, however, propose some changes in the tax structure aimed at providing more fairness in the system.

McCaskill, a Democrat, says reforms are needed at the Missouri State Tax Commission, a three-member panel that is little-known to most residents but which influences how they are taxed.

More public accountability needs to be placed on the commission, McCaskill says. In particular, she criticizes a string of decisions that have greatly reduced the assessed value of personal property owned by big companies.

"Knowledge is power," McCaskill said. "Larger corporations hire consultants who know how to work the system. Family farms and mom-and-pop businesses don't."

Where companies often get a break is on the assessed value of custom-made equipment. The commission has held that when there is no resale market for equipment, its only value is as scrap and should be assessed as such for tax purposes.

Blunt's campaign said he was unavailable for comment on the issue. Spokesman John Hancock, however, explained Blunt's stance on various areas of tax policy.

Hancock says Blunt favors changes that would provide residents with better access to the commission to appeal their property tax assessments.

"We absolutely oppose the efforts of Democrats to make it more difficult for businesses to reduce their property taxes," Hancock said. "The burden absolutely rests with the state to prove higher rates should be charged."

A mantra of Holden, whom McCaskill defeated in the Democratic primary, was for the need to close so-called corporate tax loopholes. McCaskill says the term is often code for "tax increase" and that proposed revisions need to be considered carefully.

One provision of state tax law she considers a true loophole lets businesses keep the difference if they collect more sales-tax revenue than they owe the state.

"No one should be allowed to keep money they received by overcharging on sales taxes," said McCaskill, adding that the current law provides unscrupulous businesses with an incentive to cheat consumers.

Proposals floated in recent years would require companies to either refund excess collections to their customers or, if identifying those overcharged isn't possible, forfeit the extra revenue to the state. Blunt opposes giving the state the money, Hancock said.

"Businesses serve as tax collectors for the state of Missouri," Hancock said. "The state of Missouri is entitled to what it is entitled to and not a penny more."

Review of tax credits

Tax credits have been a top issue in recent years and both candidates call for a review to weed out those that encourage fraud or fail to deliver the intended benefits. Credits offer businesses and individuals incentives to pursue some public good, such as spurring development in economically depressed areas, by providing breaks on taxes owed.

"We need to keep those credits that create jobs and eliminate those that don't," Hancock said.

In her work as auditor, McCaskill has identified problems with several tax-credit programs. One safeguard she wants implemented would establish a "clawback" procedure through which the state could recoup its money from credit recipients who haven't delivered promised benefits.

With an effort to overhaul how Missouri funds public education expected next year, an examination of the property tax structure is likely. School districts receive most of their local revenue from property taxes, which has contributed to the funding disparity between districts in affluent areas and those with little local wealth.

McCaskill says property taxes should remain a key component of education funding but ways must be found to provide some tax relief to homeowners. Hancock says Blunt has endorsed no specific proposal but favors reform "to make schools less reliant on property taxes."

mpowers@semissourian.com

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