Page 660 – Show-Me Institute

Who’s Slicing My Pie?

Posted on June 17, 2010May 5, 2026 by Joseph Steelman

Earlier this week, the Kansas City Business Journal reported:

Missouri Gov. Jay Nixon has signed legislation that would enhance tax benefits for the state’s higher education savings program.

On Monday, Nixon approved Senate Bill 772, which eliminates a 12-month holding period for contributions made to the Missouri Higher Education Savings Program.

Well, not exactly. This bill may indeed be an effort to promote more savings by Missouri families for their children’s future education, but it doesn’t entirely eliminate the holding period for contributions made into a Missouri 529 savings plan. Instead of providing contributors with more freedom pertaining to the control of their accounts, it allows the Missouri higher education savings program board to establish a “minimum length of time that contributions and earnings must be held by the savings program to qualify” for the state tax exemption. Eliminating the language that sets the minimum length of time at 12 months, but keeping the provision that allows the board to set minimum limits, doesn’t provide contributors with more information.

Proponents of the bill suggested that eliminating the mandate would allow the Missouri Higher Education Savings Program to be more competitive with similar programs in other states. Had the legislation eliminated a minimum holding period altogether, it may have accomplished that goal. In reality, it only muddies the water.

I am all in favor of eliminating government mandates, whether it be in health care, energy, or any other area in which the government attempts to control the market, but the removal of this language does not return the pie-slicer to the marketplace — rather, it keeps control in the hands of the people who cut the pie the first time around.

Show Me the Real Unemployment Rate

Posted on June 17, 2010May 5, 2026 by Vince Smith

Missouri’s unemployment rate dropped two tenths of a percent from April, according to the Department of Economic Development. The drop in unemployment can be attributed to a net gain of 4,900 new jobs in this state in May. This is a good sign, but how much does it really mean?

Considering the federal government hired 7,300 temporary census workers last month, it doesn’t mean much at all. In the private sector, Missouri actually lost jobs. Employment gains in leisure, hospitality, and “other” services experienced modest gains, but other sectors saw more substantial job losses. Construction, manufacturing, professional and business services, and educational and health services all experienced job losses in Missouri last month. Not counting the newly hired and temporary census workers, Missouri actually lost 2,400 jobs.

Furthermore, some Census workers have alleged that the bureau has engaged in repeated hiring and firing in order to intentionally inflate employment numbers. A personal friend of mine who recently worked as a Census taker in the St. Louis area claims to have filled out new hire paperwork and been retrained every time he finished a neighborhood. The training of a census employee takes three or four days, so taxpayers pick up the check for the “training” — with no actual benefit to the Census efforts — every time a worker is retrained. Ultimately, special interests affect every level of government.

Show-Me Institute Free-Market Field Trip No. 1: Shoe Shines

Posted on June 17, 2010May 5, 2026 by David Stokes

Two Show-Me Institute policy analysts, a research assistant, and two interns all head out for a free-market field trip. Shoe shines are a perfect example of how a simple exchange of money and services leaves both parties better off. The man giving the shoe shines trades some of his surplus time and effort in exchange for cash that he can use to buy many other types of goods and services that he may wish to consume. The staff trades some of their cash for a service that adds value to their shoes’ appearance, making the footwear more durable and enhancing their professional appearance.

It’s a small example, but it’s indicative of how markets work in general. The more that people engage in voluntary market transactions, the more that personal and societal wealth increases. Filmed in December 2008.

Now in Theaters: Greetings From Missouri, The Show-Me State

Posted on June 16, 2010May 5, 2026 by Christine Harbin

The Internet is ablaze with discussion of film tax credits. The New York Times published an article about government officials denying film tax credits to films that fail to paint a state in a positive light, and Matt Welch at Reason Magazine and Joseph Henchman at the Tax Foundation have since posted substantive analyses.

According to the New York Times article:

“This film is unlikely to promote tourism in Michigan or to present or reflect Michigan in a positive light,” wrote Janet Lockwood, Michigan’s film commissioner.

Missouri may or may not officially require that films promote the state as a condition of receiving tax credits, but there seems to be a correlation. I’m reminded of a scene from Up in the Air, which cashed $4,131,011 in Missouri tax credits in 2009, when George Clooney’s character sang an ode to “historic” Lambert–St. Louis International Airport:

Are you kidding — Lambert Field? The Wright brothers flew through there. That domed main terminal is the first of its kind; it’s a precursor of everything from JFK to de Gaulle.

On one hand, officials are not saying that the movies considered in the New York Times article can’t or shouldn’t be made; instead, they’re saying that the films won’t receive subsidies. On the other hand, by placing restrictions on which genres of film that it will subsidize, the government helps to pick winners and losers within an industry that is already favored.

If a state decides to subsidize certain films and not others, it should be clear and upfront about the intention of the program. Does it exist to create jobs? Economic growth? Tourism? Positive net domestic migration? Something else? If the purpose of the film tax program is to support an infant film industry, there is no reason to dictate the terms of the presentation. (This begs a further question: Would a film that featured cannibals generate a dissimilar number of jobs and economic activity to a film that didn’t?) If the purpose is to promote the state as a tourist destination, however, officials should be up-front about their intentions.

Furthermore, the practice of approving or denying the content of a film encourages people to ask the government to affirm their preferences, much like state symbols. As communicated in the article, this can even include moral judgments:

In Florida, a recent legislative proposal to bar a special tax credit for family entertainment from films or shows that exhibit “nontraditional family values” was dropped after it was widely criticized as seeming to exclude gay characters.

The moral of the story for filmmakers? If a filmmaker wants to secure film tax credits, he or she should brown-nose bureaucrats by promoting their state.

Red Light Camera and Surveillance Camera Discussion Now Online!

Posted on June 16, 2010May 5, 2026 by Audrey Spalding

If you missed the discussion about red light and surveillance cameras that the Show-Me Institute hosted on June 9, you can now watch the video online. Both Saint Louis city Alderman Antonio French, who represents the 21st ward, and Missouri Sen. Jim Lembke, who represents part of south Saint Louis city and south Saint Louis County, answered questions from our crack intern moderator Martha King and attendees:

Policing by Camera, a panel Q&A – Show-Me Institute
from Show-Me Institute on Vimeo.

French has spent nearly a year trying to get surveillance cameras installed in some of the high-crime areas of his ward. He maintains that the cameras will help police officers identify criminals, while deterring crime.

Lembke has argued against the use of red light cameras. The cameras, he says, violate due process because the owner of a car seen running a red light is presumed guilty — even if the camera cannot identify the driver.

If you are interested in how our local elected officials view the trade-offs between liberty and security, I encourage you to watch this video. Both the moderator and the public asked probing questions, which Lembke and French answered thoughtfully.

I hope that we can host similar, engaging discussions in the future. You can check back on this blog, join our email list, or become a fan of the Show-Me Institute to get updates about future events.

Smoke Screen Arguments

Posted on June 15, 2010May 5, 2026 by Caitlin Hartsell

Yesterday, Martha King made a liberty-oriented argument against cigarette taxation, noting that cigarette taxes are imposed by a majority (nonsmokers) on a minority (smokers). A study in The Public Opinion Quarterly supports her conclusion; it found that where cigarette taxation is involved, individuals are self-interested. Nonsmokers favored cigarette taxes far more than smokers did. The majority choose to impose a tax on the minority, in many cases using moral or economic arguments that the use of cigarettes leads to poor outcomes.

The Daily RFT blog picked up on her post, but didn’t seemed particularly swayed by an argument for liberty. I had a conversation yesterday morning with my coworker Abhi Sivasailam, who suggested an efficiency argument against taxation, and pointed me to a National Bureau of Economic Research working paper titled “Cigarette Taxation and the Social Consequences of Smoking.” An argument that many people make in their attempts to justify cigarette taxes is that such a tax helps to internalize the additional costs of smokers — but this study concludes that the societal cost is already internalized.

From the study’s abstract:

Detailed calculations of the financial externalities of smoking indicate that the financial savings from premature mortality in terms of lower nursing home costs and retirement pensions exceed the higher medical care and life insurance costs generated. The costs of environmental tobacco smoke are highly uncertain, but of potentially substantial magnitude. Even with recognition of these costs, current cigarette taxes exceed the magnitude of the estimated net externalities.

So, if the costs of smoking are already largely internalized, imposing additional taxes on cigarettes is inefficient. It’s also worth pointing out that cigarette taxes are regressive, and any argument that holds the state should appropriate money from smokers to pay for other programs places an undue burden on a vulnerable group.

Is it horrible that people die from smoking cigarettes? Yes. Is it horrible that people die in automobile accidents? Yes, but that doesn’t constitute a rationale for taxing cars out of existence, or cupcakes, or the many other things that people use and enjoy that can also contribute to future poor health. If free, consenting adults choose to smoke, despite the known risks, it is their prerogative.

Ramble & Rumble!

Posted on June 15, 2010May 5, 2026 by Christine Harbin

I’m looking forward to speaking with Rabbi Eukel, the radio rabbi, on Ramble & Rumble with Rabbi, Venue For Vision & Values in Our Communities tomorrow at 7:10 a.m. CST. I will talk about IDEAS, the Show-Me Institute’s newest web tool. You can listen online here. I encourage our blog readers to tune in!

Missouri’s Many Health Insurance Mandates

Posted on June 15, 2010May 5, 2026 by Caitlin Hartsell

In the recent public discussion of the autism bill and health insurance mandates, a recurring question has emerged: can a particular mandate be worth the costs — or, at least, be more worthy than most? If we follow that logic, though, where do we draw the line?

As of 2009, Missouri had 41 mandates for health insurance. Considered singly, no individual mandate had a large impact on premium costs, but they each had a marginal impact. Every incremental increase in the cost of health insurance premiums leads to the possibility that some unknown number of individuals and businesses are no longer able to afford their previous coverage.

Here is a look at mandates in Missouri (data compiled from the Council for Affordable Health Insurance):

Mandated benefits:	States with mandate	Influence on premium
Alcoholism/Substance Abuse	45	1% to 3%
Ambulatory Surgery	11	1% to 3%
Blood Lead Poisoning Screening	9	<1%
Bone Marrow Transplant	11	<1%
Bone Mass Measurement	16	<1%
Breast Reconstruction	50	<1%
Cervical Cancer/HPV Screening	31	<1%
Clinical Trial	23	<1%
Colorectal Cancer Screening	33	<1%
Contraceptive	29	1% to 3%
Dental Anesthesia	30	<1%
Diabetic Supplies	47	<1%
Drug Abuse Treatment	35	<1%
Emergency Service	47	<1%
Hair Prothesis	11	<1%
Mammography	50	<1%
Mastectomy	23	<1%
Mastectomy Minimum Stay	25	<1%
Maternity	23	1% to 3%
Maternity Minimum Stay	50	<1%
Mental Health General	39	1% to 3%
Mental Health Parity	47	5% to 10%
Newborn Hearing Screening	18	<1%
Off Label Drug Use	36	<1%
PKU/Metabolic Disorders	34	<1%
Port Wine Stain Elimination	2	<1%
Prostate Cancer Screening	36	<1%
Second Surgical Opinion	11	<1%
Well Child Care	34	1% to 3%
Mandated providers:	States with mandate	Influence on premium
Chiropractor	46	1% to 3%
Dentist	34	3% to 5%
Nurse Practitioner	31	<1%
Optometrist	44	<1%
Podiatrist	33	<1%
Psychologist	44	1% to 3%
Speech/Hearing Therapist	21	<1%
Mandated coverage:	States with mandate	Influence on premium
Continuation Dependent	43	<1%
Continuation Employee	45	<1%
Conversion to Non Group	42	1% to 3%
Dependent Student/Adult	34	<1%
Disabled Dependent	42	1% to 3%
Newborn	51	1% to 3%

As we’ve discussed before here at Show-Me Daily, injecting competition into the insurance market is really the only long-term solution that will both increase coverage and lower health care costs. Sarah Brodsky has also suggested tuition tax credits for autistic children as another alternative to insurance mandates.

Regardless of how one looks at the issue, mandates do not serve as a solution. The list provided by CAHI contained 130 different mandates throughout all of the states and Washington, D.C. Health insurance would be prohibitively expensive for far more people if every policy had to cover all 130 items, and there will still be many other conditions or diseases that are not covered. Does every 20-year-old want insurance against Alzheimer’s disease? Does every 60-year-old want insurance against autism?

With more choice in the insurance market, people can better choose for which illnesses or conditions they wish to be insured. Eliminating the way in which insurance is tied to employment and encouraging health savings accounts would allow individuals to purchase portable, cost-effective policies, saving for foreseeable health-related expenses while hedging against unknown future risk.

David Stokes Takes Out a Payday Loan

Posted on June 15, 2010May 5, 2026 by David Stokes

Check out the latest entry in our series of economic performance art pieces, in which I take out a payday loan and then quickly lose most of the money at a casino:

Accompanied by my trusty colleauges, John Payne and Josh Smith, I decided that if we were going to write about the payday loan industry we should know exactly what the process involves. I think John summed it up best in the video when he pointed out that it took him less time to buy cars than it took me to get $50 from a payday lender.

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