PROPONENTS: TAX PROPOSAL IMPACT SLIGHT

Proposition B won't have a major impact on the pocketbooks of most Missouri taxpayers, say proponents of the tax-and-reform measure for education.

If voters approve the proposal Nov. 5, it won't mean a "massive raid on their pocketbooks," said Bruce Parrish, faculty chairman on the university's Proposition B task force.

It's estimated that a two-earner Missouri family with two dependents and income of $32,500 a year the median Missouri family income would pay $5 more a year in taxes, a 42-cent-a-month increase. Those figures deal only with the sales- and income-tax impact of the measure.

Proposition B would initially provide $190 million a year for higher education and an equal amount for elementary and secondary schools.

The money would come from:

Increasing the sales tax by three-eighths of a cent, to 4.6 percent on a dollar.

Limiting the federal income tax deduction to $7,500 per taxpayer or a maximum of $15,000 on a combined return. Few households with incomes under $90,000 would be affected by the cap, Proposition B supporters maintain.

Limiting the deduction for Social Security taxes paid by self-employed persons who itemize their deductions.

Increasing the cigarette tax to 18 cents a pack, a nickel hike. It's estimated that a pack-a-day smoker would pay $1.52 more a month under the measure.

Imposing a 10 percent tax on other tobacco products.

Retaining a 1.5 percent tax on large corporations with taxable income above $100,000. The tax is currently set to expire at the end of this year, but would be continued if voters approve Proposition B.

The ballot measure also would provide $30 million in tax relief for more than 750,000 families by increasing the dependent exemption from the current $400 to $800, proponents say.

The measure, they point out, would provide the first increase in the dependency exemption since 1945.

According to state government's Office of Administration, a two-earner Missouri family with two dependents and an annual income of $32,500 would pay $49 more a year as a result of the sales tax hike. But the family would pay $44 less in income taxes as a result of the increase in the dependent exemption, the figures show.

A two-earner Missouri family with two dependents and an annual income of $67,500 would pay $34 more a year in taxes, or $2.83 more a month if Proposition B passes, according to Office of Administration estimates.

Such a family would pay $82 more a year in sales taxes but $48 less in income taxes, the figures show.

"For most Missouri families, (the tax impact) would be very slight," Parrish said Tuesday. "Because of the provision that doubles the exemption for those with dependents, it will reduce the income tax that many of them will pay in such a way to cancel out whatever increase there would be in the sales tax."

Parrish said taxpayers need to know that Proposition B is affordable. "I think it is important for them to know that it is not going to be extremely costly; it is quite affordable."

He said the Missouri General Assembly did a good job of drafting the proposition. "I think they did a pretty good job of sculpting a package that is reasonable and will work," said Parrish.

Art Wallhausen, assistant to the president at Southeast, said he believes many Missouri taxpayers erroneously expect Proposition B to result in a massive increase in the taxes they pay.

He said the state's own estimates indicate that won't be the case for most taxpayers. "In most cases, it will reduce their income tax," said Wallhausen. "The primary negative effect on people would be the relatively small sales tax" increase.

Sam Cook, co-chairman of Missourians for Quality Education, a statewide group pushing for passage of Proposition B, said in a prepared statement that Missourians prefer sales taxes to other types of taxes. "And the increase we propose translates into about 75 cents a week for the average taxpayer," he said.

Missourians for Quality Education, headquartered in Jefferson City, is comprised of business leaders, educators, lawmakers and others.

James Mathewson, Senate president pro tem, recently told members of the Missouri Press Association that taxpayers are concerned about what Proposition B will cost them.

Said Mathewson, "The base of funding is broad enough that no individual group of citizens will bear an unfair load."