David Stokes has a recurring spot on McGraw Milhaven’s KTRS radio program. In this appearance, Stokes and the host discuss topics such as transportation funding in Missouri, Missouri’s relatively low excise taxes, strange and rare taxing districts, and the homeowner in Hadley township who refuses to sell and may prevent the proposed development from moving forward.
Radio Host Charlie Brennan named Rex Sinquefield one of his five
individuals “Most Crucial to the St. Louis Region” in this radio spot.
During their discussion, Rex and Charlie highlight some of the public
policies that Rex feels need changing in order to revitalize the city of
Saint Louis and the state of Missouri.
It is a bad idea to eliminate Kansas City’s land tax. Almost every economist sees the advantage of land taxes. The general welfare calls for taxes that do the least harm in the form of affecting the quantities of goods or services that people ultimately care about. Nearly all economists agree that a land tax is one of those policies in which taxing land affects the value of the parcel, but does not affect the quantity of land. Henry George, Milton Friedman, Paul Samuelson, and Joseph Stiglitz all recognize the desirable properties associated with land taxation.
The land tax’s fundamental premise is straightforward. The tax collected is the product of the rate and some measure of the land. Any improvements to the land are not subject to the tax. With such a tax in place, the price of the land will change. Indeed, the price is simply the present value of the streams of future income that the land generates. Unlike most goods, the price change accompanying the tax implementation does not affect the quantity of land available. In other words, the supply of land is inelastic with respect to price. Under this rule, landowners seek the land’s use with the highest return. That is a good thing.
In addition, land taxation is easy to implement. The Kansas City version is based on assessed valuations of land already computed by various counties as part of the comprehensive property tax system. So, take the existing assessments, set the rate, compute the tax, and collect.
Kansas City is the only local government authorized to collect a land tax in Missouri. One would assume that when you are the only city in Missouri authorized to enact a tax that economists almost universally recommend, you would want to expand it and remove other, more harmful taxes, right?
Wrong. The Citizens’ Commission on Municipal Revenue (CCMR) recently recommended eliminating the land tax and replacing it with higher sales taxes. Whatever the sales tax is applied to will undoubtedly change the prices and quantities of goods and services. (As an aside, the proposed swap is not revenue neutral. The final result would be a substantial tax increase.) The CCRM, a group consisting mostly of lawyers and former government employees, did not explain why welfare would be higher under the sales tax. Rather, they pointed to the small monies collected from the land tax, which can be addressed by raising it instead of the sales tax. Other factors rendering the land tax undesirable, in their view, are its low growth rate over time, and the fact that it is confusing. They provide no analysis as to why the growth rate is low, and we frankly disagree that it is confusing. It is a tax on the value of land. What is confusing about that?
Let us be clear. The sales tax replacement will be added onto an already comparatively high local sales tax. Thus, prices for goods and services subject to the sales tax will rise and the quantity purchased within the taxing jurisdiction will fall. Consumers will find lower-priced items in neighboring towns, including those across the state line, with lower sales tax rates. The point is that every other taxable item has a higher elasticity and therefore, will cause greater welfare harm to people. If Kansas City seeks to minimize the harm, it would raise the land tax, not eliminate it.
If eliminated, Kansas City is unlikely to be able to re-implement the land tax due to changes in state law since it was first instituted. Kansas City has a tax that other cities in Missouri should envy, and economists would almost universally encourage. And this is what voters are being asked to eliminate in August. We hope Kansas City voters think twice before replacing the least harmful taxes like the land tax with less desirable substitutes.
Joseph Haslag is chief economist and David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.
In this video, Dr. Palmisano relates a story from early on in his medical career, testifying before congress in 1976 that national health insurance is a bad idea.
Dr. Palmisano explains why it was a bad idea then and is a bad idea now.
On Friday, July 13, 2012, the Show-Me Institute hosted an event featuring a panel of healthcare experts discussing the consequences of the Affordable Care Act, as well as a number of policy alternatives to the present law.
About the panel (from left to right):
Dr. Donald Palmisano is a physician and attorney. He is a general and vascular surgeon who teaches at Tulane Medical School. He is also former president of the American Medical Association and current spokesman for the Coalition to Protect Patients' Rights. Dr. Palmisano has testified before congress on numerous occasions and appeared on several news shows including The Today Show, Good Morning America, Nightline and Hardball with Chris Matthews.
Dr. Charles Willey is a well-known local physician who has practiced internal medicine in south Saint Louis county and surrounding areas for more than a quarter of a century. He is also the founding CEO of Essence Healthcare, a Medicare advantage health plan.
Patrick Ishmael is a policy analyst at the Show-Me Institute who has written extensively about healthcare and the Supreme Court decision. Patrick is a lawyer who's writings have appeared in the Kansas City Star, the LA Times, the Post-Dispatch and many other publications. He's also appeared on numerous radio and television shows as well.
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 improvements of the city-run Soulard Farmers’ Market, the proposed Hadley Township TIF Development, and the good and bad sides to term limits for elected officials.
Show-Me Institute Executive Director Brenda Talent was a
guest
on Saint
Louis local roundtable discussion show Donnybrook on July 5, 2012.
Among the topics covered this time were: whether Missouri should elect to participate in the medicaid expansion, the Affordable Care Act, the potential development in Hadley township and its effect on homeowners in the area, whether the prevailing wage should be paid to workers rebuilding the city of Joplin, and the fate of the AAA building on Lindell Boulevard.
First came the threat. Then the bribe, or the offer that sounds
almost too good to be true. Now it is the moment of truth.
On June 28, U.S. Supreme Court Chief Justice John Roberts
rendered the majority opinion in a 5-4 vote upholding the
constitutionality of the Affordable Care Act. However, with a 7-2
margin, the Court struck down a key part of the law that would have
stopped the flow of all federal funds for Medicaid to states that did
not expand access to this program, as the law intended.
“The financial ‘inducement’ Congress has chosen is much
more than ‘relatively mild encouragement’ to expand Medicaid,”
Roberts wrote. “It is a gun to the head.”
Because the federal government originally could have
withheld all of the state’s Medicaid funding if it did not expand its
program, Missouri would have faced a massive and essentially
mandatory increase in its Medicaid costs if this part of the law had
been upheld in its original form.
Unable to coerce state governments to spend more of their tax
money on Medicaid, the federal government is offering a grace
period of several years in which it will pick up essentially all of the
cost of the Medicaid expansion, scheduled to begin in 2014, if
individual states commit to spending money of their own in years to
follow.
Over a 10-year period, Missouri would need to commit to
spending about $430 million in order to qualify for $8.4 billion in
additional Medicaid grants from the federal government.
If that looks and sounds almost too good to be true, it is
because it literally is too good to be true.
Where is the money supposed to come from to pay for a huge
increase in this entitlement program? Do we just pretend that the
money is there when we know very well that it is not?
Our state government is already over-leveraged. And the
federal government – with a string of trillion-dollar deficits – is now
borrowing about 40 cents for every dollar it spends. Imagine adding
$400 of credit card debt for every $1,000 you spend. How long do you
think that would work?
As Show-Me Institute Executive Director Brenda Talent
explained in a recent appearance on public television, the federal
government is engaged in a Bernie Madoff kind of scheme. Our state is
already in arrears in trying to meet its current commitments. As Brenda
stated on Donnybrook on KETC-Channel 9 in Saint Louis on July 5,
Missouri will have to spend money, which it does not have, in order to
receive money from the federal government, which it does not have,
while making promises to people that it will not be able to keep.
Nebraska Gov. Dave Heineman and Iowa Gov. Terry Branstad
are already on record opposing the Medicaid expansion. Let us hope
that Missouri joins them in opting out of this part of the federal health
care plan.
It is easy to write IOUs. As Bernie Madoff did, you can – for a
while anyway – write new IOUs to replace old IOUs. But it is morally
as well as fiscally reprehensible to make promises that you cannot keep.
That is why Missouri should say “No” to the Medicaid expansion plan.
Andrew B. Wilson is a resident fellow and senior writer at the Show-Me
Institute, which promotes market solutions for Missouri public policy.
That question is asked a lot these days. The answer really depends on which figures are examined. If one looks at Missouri’s April unemployment rate (the latest figure from the Bureau of Labor Statistics), Missouri’s 7.3 percent looks pretty good compared to the country’s unemployment rate of 8.1 percent. Yet Missouri’s total economy actually shrank from 2010 to 2011. The value of all the goods and services produced in Missouri was a billion dollars less than the previous year. Total employment (that is, the total number of people actually working) also declined. Based on the weight of the evidence, Missouri is falling behind.
Considering this, it is pretty fair to say that there is considerable room to improve Missouri’s economic performance. For example, people on both sides of the aisle have called for tax credit reform. My colleague Patrick Ishmael and I have called for eliminating Missouri’s corporate income tax and making up the lost revenue with the elimination of economic development tax credits. Despite calls in the legislature for reform, the status quo remains.
It is easy to understand why different people have differing views on Missouri’s economic performance. However, the weight of the evidence supports the contention that Missouri is under-performing. Eliminating the corporate income tax is one way to make things better. State officials can do other things to improve as well (such as reforming occupational licensing).
