A Tax-Cut Change of Heart from the Post-Dispatch?
I read with interest the St. Louis Post-Dispatch‘s staff editorial, “Illinois’ economy stacks up to Missouri’s, despite Schmitt’s criticism.” Much can be said about the piece, but I found it particularly notable that the first item tallied in Illinois’ win column was, of all things, that Illinois has a lower personal income tax rate. From the Post-Dispatch:
Illinois’ personal income tax hike from 3.75 percent to 4.95 percent still leaves it lower than Missouri’s 5.9 percent. That nears 7 percent in St. Louis and Kansas City when the 1 percent earnings tax is added. Schmitt, as a state senator in 2014, sponsored a bill that is reducing Missouri’s income tax rate by 0.5 percent over five years.
That the Post-Dispatch, of all publications, would cast Missouri’s high income taxes as a mark against the state is priceless. In 2014, the same editorial board criticized Missouri’s extremely modest income tax cut, subject to revenue triggers, as “a knockout blow for Missouri’s future.” So it is good, albeit wholly unexpected, to see the Post-Dispatch finally come around to our position: that income taxes do indeed matter to economic growth, and that in Missouri, those taxes are too high.
To be clear, rates aren’t the only things that matter when it comes to economic development policy; tax brackets and exemptions matter, too, as do non-tax factors like infrastructure and workforce preparedness. To make Missouri great, all of these issues must be seriously studied and ultimately followed through on by our representatives. But the Post-Dispatch’s apparent 180-degree turnaround on the issue of income tax rates is an event worth applauding.
I hope legislators in 2018 will swiftly enact new income tax cuts that at least match Illinois’ rates and hopefully go beyond them, and examine anew the economic impact of Saint Louis’s and Kansas City’s local earnings taxes. We may not agree with the Post-Dispatch on much, but it’s good to see that on the destructive economic impact of income taxes, we may have found some common ground.
