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Corporate Welfare / Subsidies

Another Company Leaves Missouri For Kansas; Time To Stop The Madness

By Patrick Ishmael on Apr 9, 2012

The Kansas-Missouri border war has led to yet another tax incentive-fueled move. The big winner this time? Teva Neuroscience, which will move from Kansas City, Mo.,  to Overland Park, Kan., next year.

We have reached absurd levels of tax incentive parrying on the western side of the state. Teva’s current location is an 8-minute drive down the highway from its new location at the corner of College and Nall. As the crow flies, that is a move of fewer than 4 miles.


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It is clear that Missouri’s economic development status quo has been neither effective nor efficient, so I would propose a new plan: Do not participate in the taxpayer-funded tax incentive bidding wars that have companies being traded like baseball cards and have seen the state hemorrhaging tax dollars over the last decade. Simply state the reason why companies should stay in, and come to, Missouri clearly for all companies who want to find a predictable, business-friendly, and stable economic environment to set up and maintain shop.

How about ending the corporate income tax? I have noted in the past that swapping development tax credits for a wholesale elimination of the corporate income tax would be a far better approach to developing the state’s economy. As my colleague Michael Rathbone has noted, only three states in America do not have a corporate income tax or a gross receipts tax. Corporate income taxes are among the worst taxes you can institute if you are looking to pursue policies that promote economic growth. The transition could be accomplished in no small part by scrapping a development plan that has failed for more than 10 years.

Stop picking winners and losers. Missouri and Kansas officials are playing a game of economic futility when they chase companies and escalate the “targeted” tax incentive bidding wars. Both states need to wise up, but especially if Kansas continues on its path, Missouri needs to change the game — and not play on the old terms anymore.

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About the author

Patrick Ishmael

Director of Government Accountability

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