How to Succeed in Business Without Really Trying

Posted on by Michael Rathbone

Yours truly was recently a guest of New York City while it suffered through a pretty devastating hurricane. Thankfully, I am fine. The worst thing that happened to me was that I gained a few pounds from binging on Oreos and flying home in day-old clothes. Considering what happened to a lot of people in New York, I got off light.

While I was in New York, a gentleman approached my father and offered him $1 for one of my father’s cigarettes. My father declined and I realized that there are people willing to pay $1 for a single cigarette. Cigarettes are addictive, but this display of demand still took me by surprise.  What this indicates is that demand for cigarettes is pretty inelastic.

This is important because one of the arguments in favor of raising taxes on cigarettes is that it will cause smokers to quit, but if the gentleman I encountered in New York is any indication, raising the tax might not get as many people to quit as tax hike proponents believe. At the very least, if someone is willing to offer $1 for a single cigarette, how effective would a 90 cents per pack tax be in deterring smoking?

It is possible that the high cigarette tax in New York encouraged this gentleman to seek cigarettes from sources other than a convenience store (New York state imposes a $4.35 per pack tax on cigarettes). Yet raising taxes by so much brings with it its own set of problems, among them being the incidents of cigarette smuggling that occur in high tax jurisdictions. It is not the government’s job to change people’s behavior through the tax code. If my experience in New York is any indication, it will have a difficult time doing so.

McGraw Milhaven – David Stokes on KTRS

Posted on by David Stokes

David Stokes has a recurring spot on McGraw Milhaven’s KTRS radio program. In this appearance, Stokes and the host discuss topics such as the proposed TIFs for Whole Foods and a new Mercedes dealership, locations where TIFs make the least sense, historic tax credits on home renovations, the Show-Me Institute’s new paper on teacher salaries, how to attract more math and science teachers to public schools, Stokes’ election day plans, the elimination of straight-ticket ballots in MO.

 

In Defense of Gym Teachers, and Art, and Band, and Music, and . . .

Posted on by James V. Shuls

On her Education Week blog, Sara Mead wrote a piece titled “Stop Picking on Gym Teachers!” in which she takes issue with Mike McShane’s AEI blog post, “When gym teachers make more than math teachers.”

Both of these posts stem from my paper, “The Salary Straitjacket.” So who is right, Mead or McShane? Well, both are correct.

McShane writes, “Once we realize that different teachers have different labor market values, we can have a conversation about linking teacher pay to teacher performance.”

Mead concludes, “There are almost certainly circumstances where it makes sense to pay a really great gym, or art, or music teacher more than some math teachers get paid. The real problem is that our current system doesn’t take issues of value-added or demand/supply into account at all.”

Though they may disagree with who has better options in the marketplace, both scholars agree that schools should not pay all teachers the same. Instead they should reward teachers based on their marketability, which includes their performance.

I did not write “The Salary Straitjacket” simply to say that math and science teachers make less when they should make more. I wrote the paper because we need to rethink how we compensate teachers; the low pay of math and science was a clear illustration of why. In the end, it is not about one type of teacher being better or more valuable than another; it is about rewarding teachers for their unique contribution to their school.

I conclude the paper with this: “The bottom line is that Missouri school districts must depart from the single salary schedule if they want to attract and retain high-quality math and science teachers . . .” Replace math and science in that sentence with any other subject and I think the statement will still hold true. We must stop treating all teachers as if they are the same.

Kansas City Star Skittish on Streetcar Proposal, and Rightfully So

Posted on by Patrick Ishmael

I have written about how Kansas Citians living in a newly-created streetcar district will be casting ballots by mail to determine if a special tax will be levied to pay for the city’s proposed trolleys. Those ballots were mailed out on Tuesday, and the voters who received them have until Dec. 11 to return the ballots to the court administering the election in order to have the votes counted. As I said, the method of voting chosen here, hoops and all, virtually guarantees that the tax measure will pass, and likely with only a tiny fraction of the eligible voters participating. The vote creating the district passed by a 2-to-1 margin . . . but with a pathetic participation of 8 percent of registered voters. That is a tiny sample for an issue as major as this one.

Of course, just because the tax will likely pass does not justify it as good policy. The Kansas City Star — which is located in the streetcar district and, therefore, will bear some of the brunt of the new taxes — has real concerns about the proposal.

But the pluses are outweighed by the risks that would come with the new taxes imposed only in the special transportation district created to support the streetcar system. The district encompasses the core of downtown […]. That includes the Kansas City Star which is willing to pay more for a streetcar system that offers a better financed plan.

Within the relatively narrow area, the sales tax would rise by a full percentage point. Property taxes would go up as well — residential by nearly 9 percent and commercial by 5 percent.

Supporters are gambling that the higher taxes — and higher rents that would follow — won’t unduly retard downtown’s growth. However, the risk is real that the increased taxes could do just that.

Kansas Citians are among the most heavily-taxed people in the Midwest. For business owners in the proposed district, the streetcar tax is just another burden job creators will have to shoulder. As long as they remain in the district, of course.

The Star’s Lewis Diuguid was right to say back in May that private funding should be playing a far more central role in the streetcar project. Private donations were a driving force behind the building of the Kauffman Center for the Performing Arts. Why can’t it be so with the Kansas City streetcar as well?

Suppressing the Vote or Stopping Fraud: the Voter ID Debate

Posted on by John Fund

On October 25, 2012, in an event co-sponsored by the Federalist Society and the Show-Me Institute, a crowd of excited attendees gathered despite inclement weather in Saint Louis to watch a debate on the hotly contested topic of voter ID laws.

John Fund, senior editor of the American Spectator, and Denise Lieberman, senior attorney for Advancement Project, represented the opposing sides of the debate, with Missouri Circuit Court Judge Robert H. Dierker moderating.

Show-Me Video: “Suppressing the Vote or Stopping Fraud: The Voter ID Debate”

Posted on by Patrick Ishmael

On October 25, the St. Louis Federalist Society and the Show-Me Institute co-sponsored a debate entitled “Suppressing the Vote or Stopping Fraud: The Voter ID Debate.” It featured John Fund of The American Spectator and Denise Lieberman of Advancement Project. The Hon. Robert Dierker of the 22nd Judicial Circuit Court of Missouri moderated. The debate gets into full swing at 1:19.

Show-Me tech guru Josh Smith recorded the event.

Proposal to Reduce the Size of the Saint Louis Board of Aldermen

Posted on by David Stokes

Voters in the city of Saint Louis will decide on Tuesday if they would like to reduce the size of the Board of Aldermen from 28 to 14 (not including the president of the Board, which remains the same under either scenario). I think this would be a good change for the city. Why, you ask, would it be a positive change? Well, check out this op-ed on Proposition R and dive into the joy of debates about government structure.

For more information on the general question of government structure in Missouri, check out my policy study and this essay on the subject.

Privilege Seeking

Posted on by Kacie Barnes (Galbraith)

“Rent seeking,” better understood as privilege seeking, is the common practice of seeking economic gain through the political system without reciprocating with public benefits.

Recent  news of the city of Columbia offering special incentives to American Airlines, but not to Delta, prompted Phil Garcia to write about the consequences of rent seeking (and even compared the situation to his children wanting more allowance). Garcia commented how rent seeking hurts competition and raises taxpayer burdens. Check out his excellent letter to the editor in the Jefferson City News Tribune — Your Opinion: Airport ‘rent-seeking’.

Also read our posts explaining why Columbia made a poor decision, and a related op-ed about how Columbia intends to pay for an airport expansion.

Time Is Money

Posted on by Kacie Barnes (Galbraith)

Is the Saint Louis Land Reutilization Authority (LRA) backsliding? About a year ago, former Show-Me Institute Policy Analyst Audrey Spalding attended an LRA meeting in which the Board of Commissioners did not reject a single offer to purchase property. Much to my dismay, in Wednesday’s LRA meeting, the board accepted a measly five out of 23 offers.

Cassandra Griffin pleaded with the board to let her buy a small lot right next to her house. She has been maintaining the lot for years because the owner neglected the property and Griffin wanted the neighborhood to look nice. She continued maintaining the lot when the LRA acquired it earlier this year. Her offer was lower than the city’s estimated value of $1,454 — but she explained that she has already spent close to $4,000 on upkeep.

The LRA should be happy to give this small plot of land to a woman who is proud of her neighborhood and wants to keep it in good shape. Instead, one of the board members remarked that the LRA has only owned this property for about a year, and it is big enough to build on so someone else might want to buy it. Is that a good reason to turn down a buyer?

Here is a picture of Griffin’s home and the empty lot she wants to purchase (from Google Maps):

Cassandra Griffin's home.

The LRA’s mission is to put abandoned, tax-delinquent properties back into productive use. No one else has attempted to purchase this property. How long is the LRA going to hold onto it? If Griffin stopped maintaining the property, the city would spend taxpayer dollars on upkeep when they could let her own the property now, maintain it herself, and pay taxes on that land. The city could wait years before someone comes along who wants to build on this property (more likely, they may never come). Time is money.

Support Us

The work of the Show-Me Institute would not be possible without the generous support of people who are inspired by the vision of liberty and free enterprise. We hope you will join our efforts and become a Show-Me Institute sponsor.

Donate
Man on Horse Charging