If you’ve ever dreaded paying your annual property tax for the vehicles you own, you’re not alone. In fact, opponents of the long-standing tax have a new champion at the State House.
“By effect, personal property tax is very regressive. Our working- and middle-class households are taking the burden,” Sen. Bill Eigel [R-District 23]. “[It] unfairly targets the working- and middle-class households.”
The St. Charles County-based conservative is an unapologetic advocate for smaller government and points out that Missouri is one of the few states still imposing a tax on personally owned property. He notes that the state has the third-highest rate for personal property tax in the country and argues “the cost of owning two vehicles is equal to a medium valued home.”
That’s why Eigel has drafted SJR44, which he plans to push during the current legislative session. The bill would let the people of Missouri decide if they want to abolish personal property tax by way of ballot measure later this year. If the bill passes the legislature and the question is put to voters in November, Eigel is confident in the outcome.
“Most folks that are interested in cutting taxes are going to be for a bill like this,” he predicted.
John S. Kiernan is a journalist and the managing editor for Wallethub.com. Last year, Kiernan published a report ranking all 50 states by their rates of taxation on both real estate and personal property. Missouri ranks near the top of the highest rates on the “car tax,” according to Kiernan, with an effective rate of 2.72%. Only Virginia, Rhode Island and Mississippi currently impose higher rates.
Quoted in Kiernan’s report is Carolyn L. Dessin, a professor of law at the University of Akron. She noted the often-found positive benefits of higher tax rates. “It’s important to remember that level of tax is often tied to level of service – low taxes may mean weaker street maintenance, less funding for schools, etc.,” she said.
A similar conclusion was reached by one of Eigel’s Senate colleagues, Jill Schupp.
“Similar legislation filed in 2019 was estimated to drain $1.5 billion from school districts and local communities across the state. Missouri families do not want to see $1.5 billion slashed from their kids’ schools, and neither do I,” Schupp [D-District 24] said via email. “Instead, we need fiscally responsible tax relief that helps working families without hurting public schools.”
Eigel disagrees and maintains that lower taxes and less government equals more growth.
“There’s always that question of how we’re going to replace that revenue,” Eigel said, referring to the inevitable debate around eliminating personal property tax.
However, he points out that government at all levels is experiencing “record amounts of revenue coming in the door” since the legislature recently reduced the state income tax. Eigel believes the same will happen with the elimination of the personal property tax. And because the state and many local governments are in a relatively good position financially, right now is the best time to put this question to the voters, he said.
Before the question is placed on a ballot, SJR44 must pass through the Senate Ways and Means Committee. However, Eigel is optimistic of the bill’s prospects as he’s the vice-chair of that committee. The chairman is fellow Republican Andrew Koenig [District 15] of St. Louis County.
Koenig did not reply to requests for an interview.