Show Me the Tax Credits
July 20, 2007
In the Show-Me State of Missouri, state lawmakers are ready to pass a round of tax breaks for activities that the state legislature deems worthy of its approval, at the expense of other taxpayers of course. From the St. Louis Post-Dispatch:
Legislative leaders said Thursday that they had agreed on a slimmed-down economic development package to replace a similar bill Gov. Matt Blunt vetoed because he said it cost too much.
House Speaker Rod Jetton, R-Marble Hill, said he would like Blunt to call a special legislative session – “the sooner the better” – to allow legislators to approve the more modest tax break package.
Included in the latest plan would be a controversial $100 million tax credit that critics say would benefit St. Charles County developer Paul J. McKee Jr.
But this time around, lawmakers say they want to structure the tax credit to attract redevelopment of distressed neighborhoods across the state – not just in northern St. Louis, where McKee has bought up hundreds of properties.
No longer in the plan would be subsidies for tourism railroads, a $3 million credit for alternative fuel stations, a $3 million sales tax exemption for alternative fuel vehicles and a $2 million tax exemption for the purchase of school bus fuel.
The new plan would scale back a tax credit for movie production to $3.5 million from $10.5 million, while slashing a credit for beef producers by two-thirds.
Here’s a suggestion for the folks in Jefferson City: leave the tax code alone. We supposedly live in a free society where the allocation of resources is determined by the marketplace, not by political connections and the personal preferences of state legislators. This article sounds more like something out of 1980 Moscow than 2007 America.
There’s a reason movies aren’t produced in Missouri without a tax credit. There’s a reason that certain areas have less economic activity than others. It’s because the free market is sending a message that such investments are inferior to other alternatives. Raising taxes on Missourians to pay for special tax packages for certain projects is terrible fiscal policy, whether it’s for a sports stadium as the state has done in the past or a movie production.