With all the excitement of the legislative session starting, let’s not forget about the Interim Committee on Tax Credit Efficiency and Reform. It was reported last month that the committee, created last year will continue during the legislative session. Given Missouri’s large, convoluted, and distortionary tax credit programs, it’s great that this committee will continue, provided some real reforms come about.
As summarized in The Missouri Times,
. . . the committee will look at the social and cost analysis benefits of Missouri’s tax credit programs, its return on investments, economic development incentives, and other goals for tax credits…. Additionally, the committee will establish metrics for tax credits to decide whether to continue, expand, or eliminate certain programs.
This sounds like exactly what Missouri needs, but as was said when this committee was created, we need a little less conversation and a little more action. Show-Me Institute researchers have been pointing out problems with various tax credit programs for years. These programs distort incentives and give economic power to government officials. Plus, the data often show that the projects don’t deliver their promised return on investment. If an extension of this committee brings about reforms that we desperately need, then I’m all for it. But let’s not waste anyone’s time if we are going to get another report that just sits on a shelf and gathers dust.