Keep the Playing Field Level in Missouri

It will be interesting to see how the economic climate in Missouri may change under a larger Republican majority. David Lieb highlights some possible policy changes in an Associated Press article (link via Combest):

Lower taxes in all likelihood. Greater legal protection against discrimination claims. And less exposure to potential litigation involving work place illnesses and injuries.

If the state government were to reduce the overall cost of doing business in Missouri, the state would likely experience a higher marginal amount of business activity.

I emphasize the word overall. Overall welfare would increase if the state government adopted policies that affect all businesses in the same way. I worry that the state government in Missouri could decide to lower the tax burden of only a select group of businesses, which would increase the burden on those that remain in the tax base.

As an additional negative consequence, providing favors for a select group would pit industries against each other in a competition for state tax incentives. This practice would incite businesses to expend resources in an effort to solicit the favor of government officials, instead of performing productive activities in the private sector.