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State and Local Government / Budget and Spending

The Post-Dispatch’s $4 Billion Tax Hike

By Patrick Ishmael on Apr 4, 2012

Missouri’s major dailies have had quite a run over the past few days. Last week, the Kansas City Star told readers that the state’s governor needed “to promote reasonable revenue-enhancing measures” — taxes — and put more money toward state programs. The notion of “government investment” features prominently in the piece, as increasingly has become the case when “revenue-enhancing measures” are suggested, post-Stimulus. What the editorial board does not say is that the city’s own local taxes are already among the highest in the region.

Stratospheric municipal taxes overlaid with an even higher state tax burden? This will not turn out well.

But yesterday, the St. Louis Post-Dispatch, the Star‘s cross-state peer, spectacularly one-upped the Kansas City paper. The law constrains Missouri legislators on how much they can tax and spend each year, and Missouri is billions of dollars below the limit. How much of that difference would the Post-Dispatch like to spend?

All $4 billion of it.

A lot of folks purchased Mega Millions lottery tickets last week dreaming about what they could do with $640 million. Imagine what $4 billion would do for Missouri.

Let’s be clear: That is a radical tax hike proposal, tucked into what is otherwise an uninspired editorial about state and local governing responsibilities. Combined state and local tax rates have stayed roughly the same for decades in Missouri, but the Post-Dispatch would have those rates hurdle skyward to provide more public services and somehow, some way, improve the economy above the status quo.

Even the suggestion that raising taxes and then spending more would help the state makes no sense by the newspaper’s own standards. State and local tax rates have actually increased slightly since 1980, the apparent “good ole days” implied in the editorial, from 8.6 percent then to 9 percent today. The newspaper cannot even claim that plummeting tax burdens are the reason Missouri is suffering economically, because, by its own metric, taxes have actually increased over the last 30 years.

The proposal is mostly academic here in Missouri, as taxpayers and policymakers would blanch at the thought of such a hike, but the suggestion is still troubling. If implemented, the plan would have awful real-world implications — giving families less to spend and taking capital out of the market for use in less productive government programs. It is a roadmap to ruin, and yet the Post-Dispatch apparently does not see it.

“Imagine what $4 billion would do for Missouri”? No, imagine if lawmakers took their cues from Missouri’s newspapers. What a nightmare that would be.

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About the author

Patrick Ishmael

Director of Government Accountability

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