Michael Rathbone
In their struggle to pull Missouri out of the economic doldrums, policymakers in Jefferson City have proposed expanding a tax break for small businesses that add jobs. Now, this law is not exactly horrible. Worse things have come out of Jefferson City, such as Mamtek, but considering that Kansas is cutting income rates by a significant amount, isn't this action a little weak in comparison?

Like it or not, Missouri competes with other states. The tax incentive situation in Kansas City is a perfect example of such competition. The excise tax situation in Illinois is another. Yet when Kansas enacts a large tax cut, Missouri expands a tax deduction. No wonder Missouri is doing so poorly economically.

The Show-Me Institute has discussed the benefits of eliminating the state's personal income tax. My colleague Patrick Ishmael and I have argued for the state to completely eliminate the state's corporate income tax and make up any lost revenue with the elimination of economic development tax credits. Both courses of action would benefit the state's economy. Both ideas would provide a more robust response to the actions of our neighbors. Yet, in Jefferson City, it is business as usual.

Missouri has the chance to rev up its economic engine. In order to do so, it has to change the way it thinks about competing with other states and move toward more significant policy initiatives that will boost growth.

About the Author

Michael Rathbone
Policy Researcher
Michael Rathbone was a policy researcher at the Show-Me Institute. He is a native of Saint Louis and a 2008 graduate of Saint Louis University, where he earned a bachelor of science degree in biomedical engineering.