Taxes - Essay
Updated Estimates Of The Effects Of Earnings Taxes On City Growth Print E-mail
By Howard Wall   
Thursday, September 04, 2014

City governments provide important services to city residents, and these services need to be financed through taxation. In turn, taxation alters the decisions of those being taxed, and these effects need to be considered when city officials are deciding how to finance the services provided. Put simply, a city government needs to be mindful of the aphorism “If you tax something, you will get less of it.” Because of the relative immobility of property, property taxes are the most important source of tax revenue for cities; however, both the City of Saint Louis and Kansas City are relatively reliant on income taxes from their 1 percent earnings tax instead of property taxes. There is strong evidence that the economies of Saint Louis City and Kansas City have been harmed because of the cities’ reliance on earnings taxes.

 
The Comparative Expense Of The Proposed New Terminal Plan For Kansas City International Airport Print E-mail
By Joseph Miller   
Wednesday, July 16, 2014

The purpose of this essay is to analyze the cost of a proposed new terminal plan at Kansas City International Airport (MCI or KCI) versus a possible major renovation of the existing terminals. The new terminal plan that the Kansas City Aviation Department (KCAD) has proposed envisions a new single terminal that will replace the current three-terminal design, with supporting improvements to the roadways, parking lot, and airfield. The focus here is limited to a discussion of the costs of this proposal and the costs of existing terminal repairs, as defined in statements from KCAD officials and publicly released documents.

 
What Makes a Good Tax Structure Print E-mail
By Joseph Haslag and Haleigh Albers   
Wednesday, October 09, 2013

Tax reform is not limited to dealing with the complexity of the tax code. It is also about answering the question: what kind of taxes do the least harm to Missourians?

 
New Evidence of the Effects of City Earnings Taxes on Growth Print E-mail
By Howard Wall with Foreword by David Stokes and Michael Rathbone   
Monday, September 30, 2013

Although the theory behind replacing earnings taxes with other revenue sources is fairly straightforward, its empirical importance has not been settled. The purpose of the present essay is to offer a new perspective on the possible empirical implications of city earnings taxes in Saint Louis and Kansas City. Updated October 1, 2013, with a foreword by David Stokes and Michael Rathbone.

 
Why We Need School Choice Print E-mail
By James V. Shuls, Ph.D.   
Tuesday, February 12, 2013

Throughout the country, lawmakers have discussed expanding educational options for students by establishing charter schools or allowing public dollars to go to private schools. Yet bills that legislators proposed often failed to gain much traction; in part, because opponents of school choice often hail the traditional system where children are zoned for a local public school based on their address. Some view this method of delivering public education as the model because democratically elected officials control the schools on a local level. Though democratically controlled local school districts meet the needs of many students, they simply cannot satisfy the needs of all families. Many families, mine included, have found the traditional system to be frustrating and unresponsive.

 
Passing Through Missouri: Left Behind on Taxes? Print E-mail
By Patrick Ishmael and Michael Rathbone   
Friday, February 08, 2013

Missouri’s economic growth is lagging behind the rest of the country. As we wrote in our recent research report, “Cutting The Ties That Bind: End Missouri’s Corporate Income Tax,” Missouri’s economic performance places it squarely in the bottom tier of economic performers compared to other state economies.

 
Taxpayer-Funded Lobbying: Government Lobbying Government Print E-mail
By David Stokes and Abhi Sivasailam   
Monday, December 10, 2012

This paper discusses taxpayer-funded lobbying and attempts to qualify its use in Missouri. In connection with this paper, the Show-Me Institute has collected contracts between dozens of local governments and lobbying firms in Missouri and made those contracts available at smiinfo.org/lobbycontracts. Those contracts will give Missourians a better idea of who their local governments are hiring for lobbying, what they are aiming for, and how they are spending tax dollars.

The practice of government using tax dollars to lobby other governments appears to often be a lose-lose proposition for taxpayers. In many cases, if the lobbying succeeds, government expands; if it fails, government wastes tax dollars. The authors hope that this paper and the disclosure of existing contracts will subject taxpayer-funded lobbying to greater scrutiny, transparency, and accountability in Missouri.

Full Essay (PDF)

Related Links

Commentary: “Missouri’s Taxpayers Lobbying To Pay More Taxes?” by Mary Kate Hopkins

Public Documents: Missouri State and Local government lobbying contracts, searchable

 
Cutting The Ties That Bind: End Missouri’s Corporate Income Tax Print E-mail
By Patrick Ishmael and Michael Rathbone   
Thursday, November 29, 2012

For more than a decade, Missouri has suffered economically. Formerly a state of middling economic fortunes, Missouri now sits firmly in the bottom tier of growth nationally. From 1997 to 2011, Missouri was ranked 48th out of 50 states in real state gross domestic product (GDP) growth and 46th in total employment growth.

 
Slip Sliding Away: The Weak Relative Growth of the Missouri Economy Print E-mail
By Joseph Haslag and Michael Podgursky   
Tuesday, June 26, 2012

The purpose of this essay is to examine the relative economic performance of Missouri with two comparisons. Our first benchmark is the overall U.S. economy, where we find that output and job growth in our state has consistently lagged behind that of the nation as a whole. For example, if Missouri economic performance had simply paced that of the nation since 1997, state output would be $285 billion higher than it is today. We draw out the consequences of this stagnation in terms of lost tax revenues, jobs, and charitable contributions. A second benchmark is our neighbors: Missouri’s economic performance was dead last or second to last when compared to our neighboring states. In short, Missouri’s relative performance over the last decade and a half has been dreadful.

 
Attacks on Fair Tax Are Propaganda, Not Economic Analysis Print E-mail
By David Stokes   
Wednesday, March 07, 2012

The Coalition for Missouri’s Future, a group organized to oppose efforts to eliminate Missouri’s income tax and replace it with a more broadly-based sales tax (a.k.a., The Fair Tax), has produced a series of papers questioning the benefits of the switch. The papers — currently there are five — have been written by Brian Schmidt, the former executive director of the Missouri General Assembly’s Joint Committee on Tax Policy, who is now doing private consulting. The papers raise some interesting questions and fair points, but they cannot be considered legitimate economic analysis. If the organization who commissioned the papers wanted useful propaganda, they got it. If they wanted any type of serious economic analysis, the papers fail completely in that regard.

 
Payments in Lieu of Taxes as a Supplemental Revenue Source After the Earnings Tax Elimination Print E-mail
By David Stokes   
Thursday, March 31, 2011

Proposition A, passed by Missouri voters last November, requires that Kansas City and Saint Louis allow citizens the opportunity to vote on the continuation of their local earnings taxes within six months of the measure’s passage. Voters may decide to maintain their earnings taxes at that time, or they may choose to sunset it over the coming 10 years. As they weigh their decision, it is important for officials to begin considering alternative methods by which their cities can raise revenues that will fund necessary services.

 
New Evidence of the Effects of City Earnings Taxes on Growth Print E-mail
By Howard Wall   
Friday, March 25, 2011

Although the theory behind replacing earnings taxes with other revenue sources is fairly straightforward, its empirical importance has not been settled. The purpose of the present essay is to offer a new perspective on the possible empirical implications of city earnings taxes in Saint Louis and Kansas City.

 
Income Taxes vs. Sales Taxes: A Welfare Comparison Print E-mail
By Grant Casteel and Joseph Haslag   
Wednesday, December 15, 2010

Which tax structure — sales or income — is most preferred by the typical Missourian? Because both types of taxes are distortionary, it is difficult to tell whether welfare is higher under the system relying more heavily on the income tax or under the system relying more heavily on the sales tax. This essay uses quantitative methods built on logically consistent economic theory to compare welfare under the two alternative tax structures.

 
The Missouri Compromise Print E-mail
By Art Laffer   
Tuesday, November 23, 2010

A tax-swap proposal to eliminate both Missouri's personal income tax and corporate income tax in favor of a static revenue-neutral sales tax increase is currently edging ever-closer to becoming a constitutional amendment. The benefits from reform could be enormous if the process is administered well and the constitutional amendment is carefully crafted. 

 
Why a Sales Tax Is Better for Missouri Than an Income Tax Print E-mail
By Rex Sinquefield   
Tuesday, November 23, 2010

Missouri's economic development and growth rates are chronically below average. During the past 10 years, employment has grown 8.8 percent nationally, while Missouri has boosted jobs by only 6 percent. Economists have provided one explanation for the state's lagging performance: Missouri's personal income tax rates.

 
The Negative Effects of Targeted Development Tax Credits in Missouri Print E-mail
By Christine Harbin   
Monday, October 11, 2010

The state government in Missouri has issued $3,478,108,538 in targeted tax credits since 2000. Meanwhile, there is much evidence that this expenditure doesn't encourage economic activity and job growth. This essay explains how targeted tax credits programs in Missouri are a significant problem that negatively affects Missouri's economy.

 
Why a Sales Tax Is Better for Missouri than an Income Tax Print E-mail
By Rex Sinquefield and Jack Naudi   
Friday, December 18, 2009

By most measures, Missouri is not a high-tax state. Its property and corporate tax rates are among the lowest in the country. It doesn’t have an inheritance tax. In a study for the American Legislative Exchange Council (ALEC), economist Arthur Laffer, financial journalist Stephen Moore, and Jonathan Williams, director of ALEC’s Tax and Fiscal Policy Task Force, rank Missouri’s economic outlook at 23rd among states.

But all isn’t well. Missouri’s economic development and growth rates are chronically below average. During the past 10 years, employment has grown 8.8 percent nationally, while Missouri has boosted jobs by only 6 percent. In their study, Laffer, Moore, and Williams provide one explanation for the state’s lagging performance: Missouri’s personal income tax rates.

 


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