Tax Credit Bills Are Lurking in the Legislative Session
Two tax credit bills are making their way through the legislature this session. SB 733 would establish a tax credit for the music production industry and SB 732 would reauthorize the film industry tax credit. The evidence against tax credit programs is considerable, so it’s concerning and disappointing to see these bills filed in Missouri.
My colleagues and I submitted testimony for the public hearing for these bills, and our testimony echoes what Show-Me Institute researchers have said for years: Tax credits are often a bad deal for Missouri taxpayers.
Tax credit programs rarely generate enough economic activity to justify their use. Over the past few decades, Missouri has foregone billions in state tax revenue due to a host of narrow incentive programs that have consistently yielded poor results. Targeted economic development programs are just another way for lawmakers to pick winners and losers, a job that is better left to consumers in the market. When tax breaks are given to some, other taxpayers must make up for the lost revenue.
The tax credit programs that would be created through these bills would be bad deals for Missouri taxpayers. Hopefully lawmakers will do right by businesses and taxpayers and stop providing tax benefits to their favored few.