For years now, Maryland CPAs have been on alert, ready to oppose any legislative effort to raise revenue by taxing professional services like those provided by CPAs.
Sometimes, though, such efforts are disguised as something else entirely.
For proof, I give you Missouri.
Lawmakers in the Show-Me State may soon be debating the merits of a plan that would eliminate the state's 6 percent individual income tax and the 6.25 percent corporate income tax and replace them with a higher sales tax on almost everything consumers buy.
“And that means everything,” writes Virginia Young of the St. Louis Post-Dispatch, “(including) groceries, rent, new homes, doctor visits, child care, prescription drugs, private K-12 schooling and a host of other items not currently taxed.”
Estimates say the higher sales tax could range between 6 and 11 percent.
The so-called “FairTax” plan is meant to spur economic growth and attract new business to the state. You can't help but wonder how pro-business the plan really is, though, when you read the following from Young's article:
“Currently, Missouri has 132 sales tax exemptions,” she writes. “They run the gamut from feed for livestock to textbooks for college students. Services are also exempt, including those provided by doctors, accountants, housekeepers, nursing homes, lawyers and funeral homes. All would be taxed under the FairTax resolution.”
The plan is by no means a sure thing. Lawmakers are split on their feelings for the proposal, and if it gains no legislative traction, its main proponent — an investor named Rex Sinquefield — might try to turn it into a statewide ballot measure.
Whatever its fate, it serves as a cautionary tale: Pro-business plans don't always apply to your business, and raising revenue isn't always a transparent affair.
Interested in how you can join our legislative efforts? Read on: