November 3 is election day.

Missouri Amendment 7 would create the Show-Me Prosperity Investment Fund. This state endowment fund would require that the money collected be used solely to eliminate state taxes, including the individual income tax, the state sales and use tax, the state corporate income tax, and all other state-imposed taxes. After these taxes are eliminated, the amendment would prohibit reenacting them, unless the fund is unable to meet its obligations.

This is a well meaning effort to set up an endowment fund where the interest would fund our Missouri state government.

So how would that work? The state would have to collect enough extra money to invest so that the interest would exceed the amount of taxes collected. The Missouri budget is approximately 52 billion. Part of that money comes from matching dollars from the federal government. At least 13 billion is collected directly from Missouri taxpayers. Based on the current long term CD interest rates, a 300 billion dollar investment would be required to generate the 13 billion. Some estimates show that number closer to 600 billion required to replace state income. To fully fund our state budget, a 1.3 Trillion Dollar investment would be required.

Where would that money come from? Could be private citizens, anonymous out of state donors or your current tax dollars allocated by state legislators. The funding source is not specified.

The promoters of the bill estimate it could take 100 years for the endowment fund to have enough money. However, one must consider inflation. Over the past 20 years, inflation and interest rates are often very close resulting in a net gain of very little. 100 years before the program can start benefiting Missouri citizens might be a conservative estimate.

Missouri Senator Schnelting sponsored the amendment. He said, “My hope is that in, say, 100 years from now, or 125 years from now, Missouri doesn’t tax its citizens whatsoever — at all. All taxes, whether of income, corporate income, sales and use, the state portion of the personal property tax or the real estate tax, all of them will be gone. That’s the goal.”

The Cato Institute opposes the amendment “It makes more sense to focus on reducing spending so that taxes can be lowered, leaving people with more disposable income to invest. Private investment is preferable to public investment.” - Ted DeHaven, Cato Institute.

Endowments are widely used by non profits, governments and charities. However, I think a better approach is for the Missouri state government to cut spending and then cut the tax burden on Missouri. Our state should not be in the business of investing tax payers dollars.

If you have an estate or extra money you are considering donating to an endowment, look locally. There are probably organizations in your town or county that would benefit from that investment and then it stays local where it can do the most good.

Amendment 7 was voted to be placed on the ballot by your Missouri state representatives and senators.

Vote no on Amendment 7.

The last day to register to vote in Missouri is October 7.