Update on Airports in Southwest Missouri

Posted on by David Stokes

The Springfield Business-Journal has a great update on the airport market in Southwest Missouri, after a recent expansion in Springfield and the opening of a new private airport in Branson. It seems that competition is benefiting the people of the region:

[Branson Airport Executive Director Jeff] Bourk, citing $99 flights from Branson Airport to Boston, agrees that the competition is likely helping to keep fares down.

“When you’re traveling, we want you to consider all your options and use what works best for you,” he said. “But with the fares that we’re seeing, there will be more and more people using both airports.”

“Fair Tax” for Missouri

Posted on by Caitlin Hartsell

An article in yesterday’s Fulton Sun discusses the “Fair Tax” in Missouri (link via Combest), an issue we’ve covered here before. In short, a bill passed the state House during this past legislative session that would have eliminated Missouri’s income tax, replacing it with a higher sales tax, although the Senate did not consider it before the session ended. Specifically, the bill would have changed hiked the state’s sales tax from 4.225 to 5.11 percent, while eliminating the 6-percent income tax. Dubbed the “Fair Tax,” because it taxes at a flat level, the proposed tax change alone is regressive; however, to make up for this, the bill also would have provided rebates to low-income households.

The “Fair Tax” bill would also have eliminated the 6.25-percent tax on corporate income, a significant enticement for businesses to move their headquarters to Missouri. With the incentives the bill would create for businesses to relocate here, and for Missourians to marginally increase the number of hours they’re willing to work, its proponents expect the bill would positively impact Missouri’s economy. They plan to try again to pass it during the next legislative session.

Though the “Fair Tax” would be even more effective if passed at the national level, because there would be fewer loopholes to circumvent the tax, it would still be a boon for Missouri if passed only statewide — and the benefits it would provide to the economy would create an example for other states to follow.

Can I Open a Day Care Center in a Tattoo Parlor?

Posted on by David Stokes

The Post-Dispatch has had some fine articles recently about occupations involving state licensing. Both articles apply statewide, not just in St. Louis. Yesterday, there was a story about the growth in tattoo parlors around St. Louis and the entire state, and today there is a story on the Nixon administration’s plan to increase regulations on child care centers in Missouri. (Latter link via Combest.)

I basically don’t support licensing of either type of establishment. I’ll accept tattoo parlor licensing if the requirements are more focused on health issues, as they are for restaurants, and less on training requirements and education, as they are for accountants. From what I read of Missouri’s tattoo regulations, they appear to lean in the right direction. There are some educational or apprenticeship requirements, but the 300 hours required are far less than those required for many other occupations (1,500 for a cosmetologist), so that won’t increase costs by substantially limiting the number of people who can become tattoo artists.

Indeed, the article details the significant growth in tattoo parlors in Missouri during the past five years, from 217 shops to 325, in response to the surge in popularity of tattoos — which I personally cannot comprehend, but that is way beside the point. So, obviously, existing licensing requirements are not strict enough to harm the industry’s primary economic incentives.

The silliest part of laws regarding tattoo parlors are the distinctions between tattooing, piercing, and branding — as if the state has any need to distinguish between those things. Most of all, though, getting a tattoo is an entirely voluntary and unnecessary act, so I see no reason for the state to get involved in it at all. People should be responsible for their own choices and decisions.

My opinions on child care licensing are more controversial, so at least I can say I have two young kids and I obviously understand the importance of child safety. However, these proposed regulations would only apply to certain day care centers — they would not apply to church day cares, or in-home day cares serving fewer than a certain number of children.

The increased regulations would increase costs for the newly regulated establishments, as everyone admits. Those increased costs, most obviously in the form of higher staffing requirements, would in turn cause some people to choose less-expensive, unregulated options. So, even if you believe that increased licensing would increase child safety — a belief that is unproven (and I am open to being proven wrong here) — the changes would have the unintended consequence of driving some marginal number of people toward other alternatives. So, regulate them, too, you say? Sure, what the hell, let’s just regulate everyone for everything. My wife should have to get a license just to be a mom! (There are probably some people who think the government should license the right to have kids.)

For a refreshing antidote to the regulation and licensing mania in America, check out this post from the Freakonomics blog. For more information on this subject, please check out the substantial amount of work we have done regarding this issue here at the Show-Me Institute.

Energy Monopoly: Less Is Not More

Posted on by Caitlin Hartsell

Show-Me Policy Pulse cited an AP article that appeared in the Kansas City Star on Sunday about the “energy efficiency” charge that would be added to energy bills beginning in August if the governor signs pending legislation authorizing the charge. The new fee was designed to fund energy-conservation initiatives by utilities like AmerenUE:

For example, the commission last week approved a program in which St. Louis-based AmerenUE can offer credits to businesses that voluntarily shut down or scale back their electricity use during peak demand. AmerenUE will be able to recoup the cost for the program that starts Thursday by increasing the rates it charges business customers.

Instead of providing more efficient or environmentally friendly energy, this program would cost most consumers more money in order for utilities to provide less energy. It’s a short-term solution to a long-term problem: As Missouri’s population grows, and our economy produces more, we will need more energy — or a more efficient way of getting energy. If the state insists on instituting some sort of environmental energy cap or tax, it would make more sense for the program to focus on increasing efficiency in energy production and fostering alternative energy sources.

The program currently under consideration would add 3 percent to energy bills in order to fund what amounts to education efforts, and utilities would remotely control some aspects of participating customers’ energy usage, such as air conditioning. From the article:

One of the company’s more popular energy-saving initiatives has provided free programmable thermostats to about 34,000 residential customers in Missouri and Kansas. [Kansas City Power & Light] can remotely control the devices to reduce the frequency at which air conditioners run during peak demand times. The power company overrode customers’ air conditioners four times last year and twice so far this summer, [KCP&L’s senior director of public affairs] said.

A better solution would involve a way for companies to choose to buy green or more efficient energy from a competing company. Deregulating the energy monopoly would force utilities to become more efficient themselves, or give way to more efficient competitors. This competitive process should be encouraged here, rather than just paying existing utilities more to produce less.

David Stokes on the News

Posted on by Josh Smith

I didn’t catch David Stokes on Fox 2 last night in St Louis, but fortunately the clip is online. Dave was interviewed regarding the Internet furor about plans by the city of St. Louis to apply its 1-percent earnings tax to players in the All-Star Game, which St. Louis is hosting this year. As Stokes explains in the video, and as many Show-Me Institute publications have expressed before, the city earnings tax is a bad idea for the economic health of the city.

Be sure and check out the clip, and also some of our related publications, such as this op-ed and this policy study.

What to Do With Nuclear Waste in Callaway County?

Posted on by David Stokes

David Frum has a great post up about how France handles the nuclear waste generated by its vast civil nuclear program. This goes a long way toward answering one of the open questions I had in my piece arguing for an expanded nuclear presence in Missouri. In short, France reprocesses and reuses the waste, although I readily admit my own limitations in explaining it much beyond that. (I originally found the article thanks to Andrew Sullivan.)

On a closely related point, I recently found one reason why AmerenUE was so intent on expanding within Callaway County — a project that hopefully will succeed eventually. Callaway County has a commercial property tax surcharge of just 11 cents per hundred dollars of assessed valuation, one of the lowest surcharge rates in Missouri. (Only two counties are lower: Reynolds and Camden.)

All-Star Earnings Taxes

Posted on by David Stokes

Sunday’s Post-Dispatch had a good article about a planned attempt by the St. Louis  city collector’s office to apply the city’s 1-percent earnings tax to the baseball all-stars playing in St. Louis next week. (For which, by the way, I am lucky enough to have a ticket.)

One of the Show-Me Institute’s very first articles was about the lunacy of “jock taxes” like this. The city intends to tax 1 percent of the earnings of every player who earns an all-star bonus. So, for example, Albert Pujols would owe $500. (Although because Albert lives in Missouri, and plays full-time in the city, he might not be the best example.)

According to the article, there is a strong argument to be made against taxing the bonuses, and at least one city that has a “jock tax” recently chose not to tax all-star bonuses for that reason:

That’s the stance taken in Pittsburgh, which hosted the All-Star game in 2006. Pittsburgh has a 3 percent “usage fee” on the salaries of visiting athletes and entertainers, but officials ruled the bonuses were performance incentives, not pay for actually appearing in the All-Star game.

In other words, it wasn’t earned in Pittsburgh, and it can’t be taxed there, said Tim O’Donnell, with the Pittsburgh Finance Department. “Put it this way: To get selected, you’d better be playing good beforehand,” O’Donnell said.

I would love to see a player challenge this attempt and put a dent in earnings tax collections. The city of St. Louis should not be expending time and effort to collect 1 percent from everyone who sets foot in the city. (Trial lawyers who office outside the city, but benefit from city venues, are another story. They should pay a 20-percent tax on those cases — and I am only half-joking.)

Everything Tim wrote four years ago stands up perfectly in this case, and I encourage you to read his article.

One a related note, the economic benefits that come from hosting the all-star game are going to be terrific for the city, and I can’t wait to be a part of it.

One Small Step for Capitalism

Posted on by Sarah Brodsky

Here’s something to celebrate on the Fourth of July. For the first time ever, North Korea’s state television station has broadcast a beer commercial. (Under normal circumstances, North Korean state programming eschews advertising in favor of documentaries about communist dictators.)

Not surprisingly, given Kim Jong Il’s opposition to free markets, the advertisement is vague on details like price:

It was unclear how much the beer cost and how many North Koreans could afford it. The country is among the poorest in the world, with an average per capita income of $1,065 in 2008, according to the South’s central bank.

If you have to ask, you can’t afford it.

Keeping Out Competition

Posted on by Sarah Brodsky

Did you know that you can be denied a law license if you have too many outstanding student loans? Look at this quote from the New York Times:

“Applicant has not made any substantial payments on the loans,” the judges wrote in a terse decision and an unusual rejection of the committee’s recommendation.

According to these New York judges, you’re supposed to borrow money for law school and pay off the loans before you begin working as a lawyer. Only afterward will you be admitted to the bar. Never mind that people can pay off loans far more easily once they’re practicing lawyers — or that this policy gives a huge advantage to wealthy law students.

Many students with debt have become lawyers, of course, which makes this story appear to be an outrageous anomaly. And I expect that all the scrutiny from the press will lead to a reversal of the decision.

That doesn’t mean we should rest assured if this man succeeds in his quest to practice law. Occupational licensure prevents people from earning a living if they don’t meet arbitrary requirements; it’s had that pernicious effect all along. This particular case is unusual because one man was held to a higher standard than other applicants. When licensing requirements bar people from professions for falling a little bit short of the standards, which happens all the time, it doesn’t make the news.

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