A Plague on Both Your Tax Credits!
Economic development tax credits that, whatever their intended purpose, enrich a few at the cost of the many are simply bad policy. Such tax credits fail to deliver on their promises in a manner that is worth the public investment.
For this reason, when Governor Greitens blocked the issuance of low-income housing tax credits—a practice that Show-Me analysts have written for years should be exposed, sunsetted, and discontinued—it appeared that the state might have begun a journey toward putting tax credits in their proper place. Likewise, analysts have written about the wastefulness of stadium subsidies, and so we read with pleasure that Lt. Governor Parson voted against tax credits to build an ice rink and practice facility for the St. Louis Blues.
Unfortunately, further investigation reveals that there is less here than meets the eye.
Regarding the St. Louis Blues tax credit, the St. Louis Post Dispatch wrote that all three of the Governor’s appointments to the Missouri Development Finance Board voted in favor of issuing $2 million in tax credits for the ice rink. Parson was the sole vote against. His lone voice of opposition might be comforting to Missouri taxpayers until one reads further. According to the Post-Dispatch:
Parson said that while he appreciated the boost the project could give St. Louis’s economy, he could not vote to issue tax credits for a new sporting complex at a time when the state is refusing to issue any low-income housing tax credits.
The logic here is all wrong. We don’t need counterproductive tax credits to be evenly distributed (and for the record, the low-income housing credit is indeed counterproductive). What we need is for these credits to be eliminated.
If Missouri is to thrive, it needs a system of taxation that treats everyone equally, is efficient, and is dedicated to supporting the important functions of government. The tax credit system is none of those things. Even if the credits weren’t subject to abuse—and they are—and even if the state were good at delivering on economic development promises—and it isn’t—it’s long past time for Missouri’s leaders to focus on policies that hold promise for helping everyone by creating real jobs and real growth.