IDEAS IN ACTION with Jim Glassman State Income Tax Program


JIM GLASSMAN:
Welcome to Ideas in Action, a television series about ideas and their consequences. I'm Jim Glassman. This week, do you live in one of the 41 states with a state income tax? Would you trade that income tax for a higher sales tax? There's a lively movement afoot in several states to do just that. Supporters say it would help revive the economy, but critics say it would raise prices for everyone, with most of the burden falling on the poor. Joining me to discuss this topic are Carl Bearden, executive director of United for Missouri, a group advocating for the repeal of the personal income tax in that state. Jonathan Williams, of the American Legislative Exchange Council and co-author of Rich States, Poor States, an annual comparison of economic competitiveness among the states. And Jon Shure, director of state fiscal strategies on the Center on Budget and Policy priorities. The topic this week: should states ditch the income tax in favor of a sales tax?

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JIM GLASSMAN:
Today, only nine states have no income tax. But in places like Missouri and Oklahoma, there's a movement to expand that club. Supporters say states with no income taxes show stronger growth overall than states with high income taxes. But critics argue that eliminating the income tax increases the reliance on sales and property taxes. And that lifts the tax burden toward the poor, who spend a greater proportion of their income on necessities. Who wins and who loses, by ditching the state income tax? Welcome all of you to Ideas in Action. Jonathan, why is a statewide sales tax better than an income tax?

JONATHAN WILLIAMS:
Well, you know, I think legislators across the country are looking at state income taxes as a major inhibiting factor to economic growth, whether you look at revenue growth, whether you look at income growth, GDP growth at the state level or population growth, the nine states without personal income taxes across the country have vastly outperformed their high tax counterparts. And this is not only true in this past decade, but it's true over data over the last 50 years. Half century's worth of data, the no income tax states always come out on top. And as legislators look for ways to create jobs, make their states more competitive for business development, this is a big strategy that they're considering right now.

JIM GLASSMAN:
We're going to go over some of those numbers a little bit later in the show. Carl, Missouri. Missouri gets-- 68 percent of its revenues from state income taxes. And now you, among others, want to trade that in for a higher sales tax. But wouldn't the sales tax have to be really high in order to make up for all the revenue that's lost?

CARL BEARDEN:
No, not really. We-- taxing less than three percent increase in our sales tax from what we have now.

JIM GLASSMAN:
What-- what do you have now, by the way?

CARL BEARDEN:
We have-- 4.225 percent state sales tax. And then the locals all have varying rates on theirs. So we're talking about the state sales tax rate would go from 4.225 to seven percent, a slight increase again, under three percent. We would broaden our base. We're currently taxing about 25 percent of our GDP, our state GDP. And we could be taxing as much as 45 percent under this proposal. We would have exemptions in there for necessities of life, such as rent, childcare, health care, prescriptions, public transportations. All those basic needs that people-- buy every day.

JIM GLASSMAN:
So right now, the sales tax only applies to 25 percent of the state's gross domestic product.

CARL BEARDEN:
Correct.

JIM GLASSMAN:
So as you say, not food, I guess not rent, that kind of thing.

CARL BEARDEN:
Right. Food has a very small sales tax on it now. We continue to have a smaller sales tax. It would not be seven percent. So-- so the rest of the things, the rent, those sorts of things will not be taxed. They're not taxed now. They won't be taxed in the future. And that would help eliminate some of the regressivity concerns.

JIM GLASSMAN:
So what's wrong with that? I mean, why-- why would eliminating the income tax or replacing it with a sales tax with the same amount of revenue. That's the idea here. Why would that have bad consequence?

JON SHURE:
Well, first of all, we have to see if the same amount of revenue. There's an open question about that. But it doesn't just change what taxes are paid. It changes how they're paid. Right now, low and middle-income people spend a higher percentage of their income every year on buying things. Their taxes would go up under this. The wealthiest people, who get the biggest break from an income tax, they would get the biggest tax cut. So overall, state's ability to create jobs and build a strong economy would be hurt by a lack of resources. And the burden would fall most on low and middle-income people.

JIM GLASSMAN:
Yeah, how-- how do you-- how do you take into account the fact that-- that low-income people spent almost everything that they have on consumption?

CARL BEARDEN:
Well, the data's pretty clear. Again, if you eliminate the necessities that we don't tax and you get down to the basics, nothing used, for example, in this proposal would be taxed. So if you buy a used car, there's no tax. If you buy used clothing, there's no tax. So you eliminate a lot of those-- those sorts of areas.

But here's what we have. We know that people at $20,000 income spend quite a bit of their-- their-- income on those necessity of life. But we also know that the people making $200,000 spend a whole lot more than those at $20,000. And they-- they will be paying a large share of this revenue.

JIM GLASSMAN:
But they don't pay ten times more.

JON SHURE:
No, they don't. It's-- it-- the numbers don't work--

JIM GLASSMAN:
Not to make your argument for you--

JON SHURE:
The numbers don't-- no, the numbers don't work in that sense. It would seriously redistribute how-- how people pay taxes. But I'm also not convinced that it would make up the money that is-- that is lost. So the question is really states investing in what creates jobs. They won't be able to do it.

JIM GLASSMAN:
Well, we're-- we're actually assuming that it does. And I don't know whether these-- I think there has been some research on this that-- yeah.

CARL BEARDEN:
So-- so we know that-- that in our current base, just without expanding the base. If we increased the-- sales tax from 4.225 to seven percent, we're going to raise an additional $1.7 billion, out of the 4.4 billion we need to raise. We're broadening the sales tax base by $50 billion. That's the GDP expansion. 50 billion times seven percent. That's three and a half billion dollars. Three and a half plus 1.7, if I recall. It's been a long time since I've been in school, but 3.5 plus 1.7's 5.2 in excess of the 4.4 we're trying to replace.

JIM GLASSMAN:
Okay, so let's-- let's just-- let me ask you a basic question here, 'cause we don't want to get too much into the weeds of-- of too many percentages. But if you tax consumption, doesn't that hurt the economy? I mean, we keep hearing how we've got a consumer-driven economy. And when you tax something, you get less of it. So why-- why would we want to tax consumption? That would hurt the economy, right?

JONATHAN WILLIAMS:
Well, I mean, all taxes matter to growth, obviously. Just some matter more than others. If you look at, for instance, taxes on capital, some of the most mobile factors out there is capital is more mobile today, going all throughout the world. Even if you look at OECD, not really a conservative think tank, they said taxes on--

JIM GLASSMAN:
OECD stands for?

JONATHAN WILLIAMS:
Organizational Economic Cooperation Development, which is the major--

JIM GLASSMAN:
For the developed countries.

JONATHAN WILLIAMS:
In-- in developed-- economic countries said that taxes on capital, corporate income taxes, other taxes on capital-- are the most damaging to growth. And this comes from OECD, very non-- biased, non-partisan source.

JIM GLASSMAN:
In-- hold-- let me just stop. Is-- isn't that right though, Jon? I mean, you hear this. I think you hear this from economists of all stripes that the last thing you want to tax is investment, because investment is what creates job. If you have to tax something, you should tax consumption--

JON SHURE:
Well, states-- state-- well, there's a reason why most states have both a sales tax and an income tax, because that balance makes sense. In tough economic times, the sales tax might be-- perform stronger. In good economic times, the income tax brings in revenues that you can reserve for the future. That's why no state has gotten rid of an income tax in over 20 years, 'cause that balance makes sense. So if you don't-- if you-- if you throw away one of your most important tools for investing in jobs and economic growth and only rely on the other tool, you've lost the balance that makes so much sense and that works so well.

JIM GLASSMAN:
Let's explore this-- this issue of taxing consumption. I mean really, if you tax consumption, even a little bit more, you're going to get less of it, right?

CARL BEARDEN:
Well, it's interesting, because we-- we've taken over 100 grassroots people, just everyday people out of their communities to Tennessee-- our next-door neighbor who has no income tax, no individual income tax, and compare that. We let them shop $100 at a store at-- in Missouri and $100 buying the same things in Tennessee. And they found that that difference was very, very minimal, that on that $100, they may have paid two cents to $3-- two cents to $3 more. And so what we find is that that is not a large enough increase to drive consumption. If you-- if you-- went to 10 percent or above, I think then you might have that consideration.

JIM GLASSMAN:
But I hear people-- drive across the state line between Maryland and Delaware, where there's no-- there's no sales tax in Delaware.

CARL BEARDEN:
Right. So-- so the data actually shows that-- that you'll do most of your shopping where you live. And so with the-- with the exception of once in a while, major, big-ticket items, you're going to do most of your shopping where you live. We have that same situation in Missouri. Kansas Line and the Missouri line. You cross a street and you're in one state.

Kansas has a much higher tax on food, for example, than Missouri does. And yet we don't see all the grocery stores on the Missouri line. They're-- they're on the same side in Kansas. And so there is a flexibility. And what we're talking about is a small enough increase not to impact consumer credit. You know, as a former budget chairman in-- in the state of Missouri, I would-- I would gladly have traded a more stable revenue source over time as a sales tax than I would an income tax that goes way up and then goes way down, because it makes our life easier and the cuts in-- in government spending aren't quite as severe.

JIM GLASSMAN:
That is true though. Sales taxes are-- are more-- a more stable source of income.

JON SHURE:
In bad economic times. In good economic times, you need the-- the-- the revenue that you get from-- from an income tax. That's why the balance is good. But I want to go back to something. You know, what's radical about this is that if a state does this, they will have to have the highest sales tax they've ever had in their history. And they'll have to tax more things than they've ever taxed before. I've seen proposals to tax babysitting and prescription drugs.

So you know, it's-- it's kind of a radical experiment just to get rid of a tax that actually performs very well and is part of a balance. And you can compare Missouri and Tennessee. The average person in Missouri makes $2000 a year more than in Tennessee. So obviously Tennessee is not being hurt by having this-- this income tax.

JIM GLASSMAN:
Actually-- you talk about an experiment. This is a good time to take a look at some of these numbers that Jonathan was talking about from the study that looked at the nine states that don't have an income tax versus the-- the 41 states that do. As far as gross domestic product within the state, over 10 years from '98 to 2008, the growth in the nine states without an income tax was 86 percent. The nine states with the highest income tax, 60 percent growth in GDP. Population growth, nine states with zero, 16 percent, nine states with the highest, six percent. Non-farm payroll. So this is a good employment figure. 18 percent growth in the states with no tax, eight percent in the state with tax. So Jon, I mean, obviously, it's not a perfect experiment, although the variety within these states that don't have a state income tax is pretty-- pretty high.

JON SHURE:
Well--

JIM GLASSMAN:
You got-- you got states like North Dakota and-- and-- you know, Nevada. And you've got other-- you got large states like-- Texas and Florida. So isn't this significant, these results--

JON SHURE:
It's-- it's pretty far from a perfect experiment. I-- I got to be honest with you. If the whole thing is based on these numbers, we should just go home, because these numbers--

JIM GLASSMAN:
We're not going to go home.

JON SHURE:
Okay, well these numbers are like saying, you know, "The rooster crowed this morning and the sun came up. So the rooster made the sun come up." They ignore all kinds of other factors. The climate, the natural resources, the jobs, the housing prices. And you can-- you know, you can cherry-pick wherever you want. There's no state with a worse financial crisis than Nevada today. They have no income tax. Last year in Florida, for the first time since World War II, more people left the state than came. They have no income tax. If income tax-- if not having an income tax were magic, we'd see a whole different picture.

JIM GLASSMAN:
Jonathan?

JONATHAN WILLIAMS:
Well, actually, I mean, the Florida numbers have picked back up. Florida's actually gaining population again. You take a look at this nine states versus the nine states with the highest tax rates, 10 years worth of data. You have a very good cross-section of states here. This-- these relationships of higher growth with the states that avoid income taxes are not just true in this ten-year window. They're true if you-- they're true if you look at a whole half-century worth of data, which, by the way, we've seen states come in and out of that group of the no-income tax states.

JIM GLASSMAN:
Actually-- wouldn't a better experiment be a state that got rid of its state income tax or a state that significantly lowered its state income tax? Do we have any of those?

JONATHAN WILLIAMS:
Oh sure, I mean, you take a look at Alaska eliminated their state income tax. You've seen, you know, some pretty positive growth in Alaska. But you know, the other thing we do is take a look over the last 50 years at the 11 states that have instituted an income tax over that period. And we take a look at their growth prior to the income tax imposition and we take a look at their growth today. And without exception across those states, you see their relative growth-- to the United States economy shrink, after the imposition of an income tax.

JIM GLASSMAN:
And what-- what are some of those states?

JONATHAN WILLIAMS:
Well, you take a look at my home state of Michigan for instance. You take a look at Illinois. You take a look at Pennsylvania. You look at-- take a look at Ohio, Rhode Island. Many of those states today are really shells of what they are-- what they used to be. Of course, not all of that's-- related to the personal income tax--

JIM GLASSMAN:
Although-- although--

JONATHAN WILLIAMS:
--But certainly it's a direct incentive.

JIM GLASSMAN:
Although you named a bunch of states in the-- the rust belt, so-called rust belt, that are having a hard time-- economically. Do you think it's because of the institution of the income--

CARL BEARDEN:
Well, I think you can look at Illinois specifically. And the Bureau of Labor Statistics show, since they implemented their newest tax-- income tax increase, they've lost 18 jobs an hour as-- from January through August. They've lost a total of 106,000 jobs during that period of time.

You know, Missouri's GDP is 48th in the nation for the last 10, 12 years. We're 43rd over the last 50 years. We can do better. Only Michigan, his home state and Ohio are behind us. And they're trying to move up. And I-- I believe that-- you know, we don't compare ourselves to Texas. We don't compare ourselves to Nevada or Florida, although the sun shines just as bright in Florida today as it did 30 years ago. And they've-- they've grown.

We compare ourselves to Tennessee, which I think is an apple-to-apple comparison. The reason that people in Missouri make a higher per capita income is because we have a higher educated work force. We've been at it longer than Tennessee. They-- they got started in the 1930s, when TVA came. Up until that time, they were-- they were very--

JIM GLASSMAN:
Tennessee Valley Authority.

CARL BEARDEN:
Exactly, exactly. So-- so they-- but they've caught up very quickly. And about 13, 14 years ago, they surpassed Missouri on population growth. They surpassed us in GDP growth. And they-- they get to keep nine Congressional seats during the last census. We lost a Congressional seat, even though we grew.

JIM GLASSMAN:
What about that? I mean, there-- there-- now those are two states. They're contiguous, although Tennessee's contiguous with lots of states. They're fairly similar states. And Tennessee's been growing a lot. Missouri has not.

JON SHURE:
Well, to-- to think that because one state is growing and one state is not growing as much. And to say it's all because one state has an income tax and it does-- it's just oversimplifying and cherry-picking-- it makes no-- it makes no sense.

JIM GLASSMAN:
Well, there's no doubt that-- that the economics is not-- the economics is not---- economics is not biology. On the other hand, you know, you got to make a judgment based on something.

JON SHURE:
Well, you've got to make a judgment based on everything. And that's the problem. This analysis just picks one thing and makes a judgment based on that.

JIM GLASSMAN:
Okay, so what's the ju--

JON SHURE:
If Missouri has a much more skilled, highly qualified work force, there's a reason for that. It's because they've made the investments over the years to have those things, and that takes the revenues that you'd lose if you got rid of the income tax.

JIM GLASSMAN:
What-- what's the argument from an economic point of view for keeping the current system of state income taxes?

JON SHURE:
The best argument for keeping it is that you need balance. That to have both kinds of taxes protects you in different kinds of economic situations. Again, that's why states do it. That's why most states have always kept it that way.

JIM GLASSMAN:
As-- as head of the budget committee, wouldn't-- wouldn't you want to share in the revenues from let's say Capital Gains? The stock market goes way up. Rich people, as well as others, cash in their stocks. Big capital gains. You get-- you-- you get the profits.

CARL BEARDEN:
So that reliance causes a lot of problems, 'cause when that money comes in. I mean, it's nice of Jon to say that we'd put that stuff away. Most states don't put it away. They spend it. And that's what happened to Missouri. You know, the building tools we have-- income tax is kind of like asbestos. You know, it used to be a great thing. It used to insulate us and do all these sorts of things.

But it's a bad thing. You know, we know asbestos causes all sorts of damage, whereas the-- the sales tax, it does better at-- others. The downturn's much better. And it doesn't go down in the good times. It provides you a steady increase. It rises as-- it rises some, not as much as the income tax, but then you don't spend as much either. And so you have a more manageable, service-friendly provider than you do with an income tax.

JIM GLASSMAN:
But just to take your-- analogy with asbestos, you know, states have gotten rid of the use of asbestos. So why haven't states woken up to the fact that income taxes are toxic and vote them out and go to the sales tax?

CARL BEARDEN:
Great question, because if you look-- Tennessee has eight states border it. Missouri has eight states bordering us. All the states that border us, with the exception of Tennessee, 'cause we're already there, are looking at some sort of tax reform. I know we-- we already talked about Illinois. Their tax reform is going in the wrong direction by raising taxes, driving jobs out.

But every other state around us is looking about eliminating or reducing their income tax. So they are looking at that. Kansas has a big proposal out to eliminate theirs. Oklahoma's trying to speed theirs up. Kentucky, who has the lowest sales tax of any of the-- the states that border us is also looking at this type of program. So it is something that is very lively. And it's something that-- that I understand why Jon is upset with-- with some of these things, because a lot of people are looking at that. And it's a battle-- I think it's a great discussion to have.

JIM GLASSMAN:
Why would he be upset? He-- he-- he wants America to grow.

CARL BEARDEN:
He does.

JON SHURE:
I-- I want every state to grow. I think if-- if Carl believed what he's saying, he probably would have moved to Tennessee a long time ago. There's no income tax there. No, I think states-- states have to do what's right. You know, the-- the people that we elect in states are the stewards of the economic future of the state. They need to look at what got them where they are today.

What attracts businesses and people is investment in education and transportation and everything else. You get rid of the income tax. And you'll be sorry. You'll be sorry that the state no longer has the capacity to grow and, as I said before, it's now created a state where the lower your income, middle-class people have now had a huge tax increase. The wealthiest people have gotten the big tax cut.

JIM GLASSMAN:
So your main argument is that states need-- a consistent flow of income.

JON SHURE:
State needs stability and balance.

JIM GLASSMAN:
And you don't buy the argument that eliminating a tax on income would help a state to grow.

JON SHURE:
The argument, frankly, is not based on any real connections.

JONATHAN WILLIAMS:
There's plenty of economic-- academic research that suggests otherwise and that it does produce growth. And they isolate out the variables. We do a simple correlation relationship over 50 years, over nine states-- without income taxes that pro-- that shows very strong correlation. You look at correlation on the other hand--

JIM GLASSMAN:
And correlation is--

(OVERTALK)

JONATHAN WILLIAMS:
It's not cause and effect. But certainly over a 50-year period, that relationship--

(OVERTALK)

JIM GLASSMAN:
--Cause and effect in any kind of--

JON SHURE:
Ask-- ask the people in Nevada. The state's a basket case and they have no income tax.

JIM GLASSMAN:
Yeah, what about that?

JONATHAN WILLIAMS:
Well, if states want to follow that approach of just raising income taxes-- Texas is more than happy to take your jobs, gaining four Congressional--

(OVERTALK)

JON SHURE:
Well, you know, nobody said just raise income tax--

JONATHAN WILLIAMS:
--Over the last ten years.

JON SHURE:
We said we need a balance, because that's what works best over time. Texas is laying off 100,000 teachers.

JIM GLASSMAN:
But the fact is that over a long period of time, Texas has really been thriving. And it is-- is the most significant, along with Florida, of the no income tax states. And if you talk to people in Texas, and I live half the time in Texas, they will tell you that one of the reasons that they moved their businesses to Texas from California is the tax situation. There are others. There are other reasons as well, regulatory issues-- tort reform. But the tax situation is-- is really one of the main reasons.

JON SHURE:
And oil helps too. It brings in a lot of revenue. And I can tell you. I can find plenty of people in Texas who'll say, "You know, if Texas had the courage to also have an income tax, they could invest in education and everything else. And they would not just have as many jobs as they'd have. They'd actually have good jobs."

JIM GLASSMAN:
Carl?

CARL BEARDEN:
I think that, you know, if you do look at Texas, and excellent point again. We don't compare ourselves, Texas. Oil doesn't make up nearly as much of our budget as people want to-- want to-- pretend that it does. But here's-- here's the case. When DCI does market analysis of why-- companies move, they say, "What's the first thing you do?" Well, we-- we create a shortlist. Well, how do you get on the shortlist? They do this before they even contact the state economic development. You get on a shortlist because of business climate and tax policy. So Texas is ranked number one in-- in highest-- business-friendly climate since 1999.

And when you ask those people exactly what you're talking about, why you chose Texas, 44 percent of them tell you that it was because of their tax policy. 31 percent say it was because of their business climate. It does make a difference. And-- and we may not-- you know, I'm in Missouri. Actually, there was a Bearden in Tennessee. And-- and I do have a lot of family history in-- in Tennessee.

I'm in Missouri, 'cause I have two great grandkids that live there. Their-- their mom and dad are professionals, who can, in today's technology, can do those jobs from anywhere. I want my grandkids to have a place and a reason to stay in Missouri, because I want their parents to stay there. And if their parents stay, they're likely to stay.

JIM GLASSMAN:
Jonathan, I know your organization is concerned about states. But is there an-- a federal application to what you've learned in your research? In other words, should we go to a consumption tax or something-- a partial consumption tax, 9-9-9 or (LAUGH)-- or, you know, the kinds of flat taxes that people have talked about that are actually consumption taxes?

JONATHAN WILLIAMS:
Well, I mean, you take a look at the most mobile factors out there today, like we talked about. And taxing capital at the lowest level possible is a good pro-growth-- stimulus, whether you look at it international level, federal level, state level. Now today, of course, our corporate-- federal corporate tax rate of 35 percent, second highest in the world-- our companies are struggling to compete against their foreign-- competitors.

We have to do some big things at the national level to get things under control, whether that means-- a flatter tax system-- or lower rates overall on capital. That's something we have to look at. At the state level, we certainly see that application. At the international level, you see that application.

Look at the-- the OECD countries, as I mentioned earlier. Take a look at the Eastern European countries and what they've been able to accomplish, first as their high tax counterparts in Western Europe and the flow of capital that's going from western to Eastern Europe. And now with the eve of their-- their talk of tax harmonization to say, "You must have a limited or a minimum tax rate to be part of the EU system," because they see this tax competition in action, capital moving to the low tax areas.

JIM GLASSMAN:
Okay, let's-- I just want to go around the table and ask-- what you think the future of eliminating state income taxes is. Carl.

CARL BEARDEN:
I-- I think that it's pretty high. I think most states who have income taxes now. Most of the people working in those states have never worked under an environment where there wasn't a state income tax. So there's an educational proponent, which is what we try to do in Missouri. The more people learn about this, and we've talked to thousands of people across the state. The more people learn about it, they understand it, the more they like it, because it puts them in the driver's seat. They get to choose what tax they're paying, how much they're paying, whether they buy used, new or what have you. They get to make that decision. And it's not an automatic deduction from their check.

JIM GLASSMAN:
And are you going to have a vote in Missouri about whether to go from income taxes to sales taxes?

CARL BEARDEN:
We're working on right now, trying to-- have that on the ballot in 2012.

JIM GLASSMAN:
It has to be on the ballot. So why-- why doesn't the-- just quickly. Why doesn't the legislature just go ahead and approve it?

CARL BEARDEN:
Well, letting the super committee come to an agreement. You know, there's all sorts of disagreement poli-- politicians, elected officials. And speaking as a reformed one or whatever-- you know, it's very difficult for them to make these sorts of decisions. And so the people will sign an issue petition process in the state of Missouri. They will decide whether or not it goes on the ballot.

JIM GLASSMAN:
Okay. Jonathan, what do you think the future of eliminating state incomes taxes it?

JONATHAN WILLIAMS:
Well, I'm quite bullish on the future of-- elimination of state income taxes across the country, because legislators look to success stories like Texas and wonder, you know, how we might be able to emulate it. I know Jon said earlier, they rely a lot on oil and gas. Only three percent of their budget comes from severance tax revenue, which is much lower than many of the other states out there today. They have--

JIM GLASSMAN:
Severance is energy tax.

JONATHAN WILLIAMS:
Extraction on oil and gas, absolutely. And so you look at the states that are doing well today. People want to know, "How can we create jobs?" Being from Michigan-- where a state where we've been desperate to do everything we can to create jobs-- we had really a lost decade over the last 10 years of-- lost job creation. There are no opportunities for-- people when they graduated.

We-- by the way, we have great research institutions. We spend a lot on K12 education. But if the jobs aren't there, people are going to go to other states where the jobs are. And as people look to emulate that job creation engine of Texas and other states, they're going to be looking at an income tax pretty seriously.

JIM GLASSMAN:
Jon, future?

JON SHURE:
Like-- like the decline of the income taxes because of the auto-- auto industry. I think people in the show-me state and other states have a lot of common sense. And when they see the consequences of this, they're going to pay 10, 11 percent sales tax. They're going to have to pay sales tax on things they never paid tax on before. They lose the advantage of, you know, you lose your job. You don't have to pay income tax. So I think in the end, common sense will prevail. Balance will prevail. And states will stay on the course that's been tried and true over time.

JIM GLASSMAN:
Thank you, Jon. Thank you, Carl. And thank you, Jonathan. And that's it for this week's Ideas in Action. I'm Jim Glassman. Thanks for watching.

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