This is off-topic for us, and not even related to Missouri — but it’s close to Missouri and very, very interesting. So I feel the need to throw a major recommendation for my buddy, the ArchPundit, who has been kicking (bleep) in covering a certain story taking place across a big river in a bordering state that does not have personal property taxes. …
Smoke-Free KC
We probably didn’t give enough coverage on this blog to Kansas City’s ban of smoking in public places. Needless to say, the policy was enacted and is now being challenged in court. The Star has the story here. I will try to do a better job of following the case from here forward, although we did have an excellent general write-up on the issue at the beginning of the year.
I have always seen both sides of the issue, but because I worked to pass a smoking ban in the St. Louis County when I worked for Kurt Odenwald, I am not going to be a hypocrite now and come out against them. Especially because I see very good arguments for smoking bans — and if it were up to me, and me alone, I would institute a loose one in the county (i.e., some bars could opt out, cigar clubs could still exist, that type of compromise). Pretty much everyone else here at the Show-Me Institute will disagree vehemently with me, but, heh, this is one of the examples of why I am not a libertarian.
So, it will be interesting to see the result in Kansas City, because the issue will return to St. Louis at some point, and probably soon. You can put that in your pipe and smoke it.
No Taxation Without Ambulation
Missouri’s budget crisis is certainly in the news, so some legislators are trying to innovate their way out. According to an article in the St. Louis Business Journal (snippet from the online version), a tax on Internet-based sales will be proposed in the Missouri General Assembly in January.
The bill is called the “Streamlined Sales and Use Tax Agreement Act,” and has already been pre-filed, so it can be found on Policy Pulse in a search with keywords from the bill’s title. Why can’t it be found by searching the keyword “Internet” or “e-commerce?” Well, this bill doesn’t only tax Internet sales. It is a complete overhaul of the Missouri sales tax system, in which tax becomes assessed at the point of delivery, rather than at the point of purchase. As pointed out in the Business Journal‘s article:
Missouri currently has a total of 2,173 local sales taxing jurisdictions. The only other state with a higher number of such bodies is Louisiana.
The article is not too friendly to the idea proposed in the bill, and points out the difficulties of administering such a tax system.
This proposed legislation is also an attempt to bring Missouri in line with a larger movement, the Streamlined Sales and Use Tax Agreement; here’s a list of current participating states. In the Business Journal, Sen. Joan Bray, the bill’s sponsor, said, “Kansas went through the process and Washington state is going through the process.” Here is a decent article that discusses Washington’s recent change, and the SSUTA. From the article:
In 1992, the U.S. Supreme Court ruled states could not force businesses to pay a sales tax unless the company has a physical presence in the state.
This federal ruling means that membership and participation in the SSUTA is voluntary, and 22 states have already joined in at least some capacity.
I am opposed to this proposal for Missouri not only because of the high cost of implementing and enforcing the measure, but also because of the limitation that this represents on the free choice provided by the Internet. It is currently possible to buy many things you need or want on the Internet at prices that are competitive with local stores, even after shipping costs are considered. This is a tremendous boon for people who don’t happen to live near a major metropolitan area, and a nice opportunity to comparison shop from far and wide. A tax on Internet sales is yet one more way that legislatures are attempting to restrict the wonderful boon that Internet commerce represents, for buyers and sellers alike.
Musing About Shoeshines, and the Free-Market Question of the Week
One of our two terrific interns, Calvin, and I had a great talk on the way back to the office from City Hall today. (We were there to distribute copies of our recent studies to the Board of Aldermen, the mayor, etc., but that does not relate to this post.) Calvin and I share very similar beliefs about questions like social capital and interaction, best described in the famous book Bowling Alone.
Somehow, the talk turned to shoeshines, and we began to think of the many great things about getting a shoeshine. When you get your shoes shined at a place like Andre’s in Clayton, you: A) improve the value of an asset, in that your shoes will look more professional and better handle wear and tear; and, B) have a very pleasant time in the process, because shoeshine proprietors tend to be good conversationalists, like bartenders, or perhaps you’d just quietly enjoy the newspaper; and, finally, C) get both of these things for what we all consider to be a very inexpensive price — about $7.
So, I ask you, before I leave to go get a shoeshine, what are some other things that have these three qualities? There are lots of serves with which you spend a little money to improve the value of something you own, but it is usually not fun to go to the dry cleaners. There are countless ways to have a pleasant experience for a little money, like going to a nice bar, but they generally don’t improve the value of anything. Lastly, there are clearly things that improve the value of an asset, and are fun, but are not considered inexpensive — like golf lessons.
My initial inclination is that a car wash is the closest thing to a shoeshine. For people who enjoy yard work, gardening might fit here, too. A small investment in seeds and hand tools can lead to hours of enjoyment in your yard, improving the value of your property. Haircuts could almost make it — but for women, at least, a trip to the stylist is not cheap. Let me know your thoughts. …
The Next Big Thing
The state-appointed Special Administrative Board that currently oversees St. Louis’ unaccredited public school district will be announcing today a new plan to improve student performance in the city’s schools. The plan appears to include efforts to close underutilized facilities and to increase the accountability of teachers and principals for their students’ academic performance, among dozens of other proposals.
Even if the board manages to implement these changes effectively, the solutions proposed seem to avoid the most direct solution: Let parents choose which schools their children will attend. Despite the district’s lack of accreditation, there are some good public schools in St. Louis — and parents who pay taxes to support them ought to have at least a chance to send their children to those schools!
The parents will recognize (far better than the district’s bureaucrats) which principals and teachers are doing the best work for their children. If any given school cannot retain a critical mass of its students, the district can close that facility and focus on — and perhaps increase capacity at — the schools with excess parental demand. In addition to offering parents the best chance to find schools that will work best for their children, giving parents this sort of opportunity means that the district won’t have to spend nearly as much money paying “experts” to come in and decide which teachers, principals, and schools are effective and which should be fired/closed.
Voting in Schools
Maybe I would be more sensitive to this issue if I were a parent or principal, but I don’t see why voting in schools is such a big deal. In the worst-case scenario, a school cancels classes. Then parents have to find alternative child care — an inconvenience, but no different from cancellations for professional development or snowstorms.
I’m not convinced that it’s such a security threat, either. Students go on field trips all the time, on which they encounter crowds of strangers. If teachers can handle field trips to public museums, why can’t they supervise students on election day? And is it really so traumatic for students to eat lunch in their classrooms one day a year?
Furthermore, the suggestion that voting take place in firehouses instead is a terrible idea. Imagine all those people lining up outside the firehouses and blocking fire trucks. Inconveniencing firefighters who are trying to save lives would be far worse than inconveniencing teachers who are trying to escort their classes to a computer lab.
Picking Favorites
According to the St. Louis Post-Dispatch, a bill is being pushed that, if passed, would give tax breaks up to $2,000 for owners of hybrid vehicles. This move would serve as an incentive for Missourians to buy these greener cars and help out the environment. But do people really need another incentive to buy a hybrid? It’s already the cool thing to do. All the celebrities drive hybrids, and who wouldn’t want a car with much better gas mileage?
I fear there are political motivations behind this tax break idea, and that the well-being of the environment is not the primary concern. A tax break to buy hybrids does two things: First, like so much green legislation, it gives the policymakers a green image in the eyes of the public. With green policies being so popular, especially with young voters, they have a political incentive to pass it. I’ll just call this a positive externality, regardless of whether the intentions are positive. The new law would act as a Pigovian subsidy, encouraging individuals to reduce the emissions they might otherwise create by, in this case, buying more hybrids. The second result is obvious: Creating an additional incentive to purchase new, American-made cars will cast policymakers as heroes to automakers — companies that are more than willing to fund future campaigns if it will lead to legislation that increases their sales.
Like so many green ideas out there, hybrids are seen as flawless vehicles, but there are drawbacks, some of which do not apply to standard cars. For instance, materials used in hybrid car batteries are known carcinogens, and some materials in these batteries are quite rare; an increase in demand will drive up the costs still further. Of course, standard car batteries aren’t exactly safe for consumption either, being composed primarily of lead. But that is neither here nor there. What is surprising is that throughout the lifespan of both types of vehicles, including production and disposal, hybrids require more energy than traditional vehicles. This is reflected in their higher production cost. People are still willing to pay this extra cost if means staying green, and that’s the beauty of choice. But the proposed subsidy takes only one set of externalities into account, and so may not be promoting real efficiency.
Just to make the issue personal, signs like this are popping all over the place — including down the street from the Show-Me Institute’s office. Where will this end? I, for one, am tired of being villainized because I drive a regular vehicle. Where’s my reserved parking spot and tax break? I blame all of this on Stan Marsh’s stupid little song.
Stokes Massages the Post-Dispatch
The Show-Me Institute’s very own David Stokes was interviewed by David Nicklaus of the St. Louis Post-Dispatch for an article discussing the topic of licensing in the state of Missouri. While Missouri has been ranked to have the least amount of licensing restrictions, Stokes was still able to show how regulation can affect the economy by focusing on the massage therapy industry, which is a licensed profession in Missouri but not in Kansas.
His latest case study compared the prices of the metropolitan Kansas City market on both sides of the state line, and compared Springfield to Wichita. Unsurprisingly, the data show that Missourians pay a higher cost for massage services, a situation likely caused by market regulation. Stokes is quoted in the article as saying:
“This is a system designed to limit competition for the people who have the current licenses,” Stokes asserts. “That’s the only reason. Everything else is a smoke screen.”
I agree with David Stokes 100 percent. It baffles me how people try to argue for occupational licensing by saying that it is a form of consumer protection. Although his study demonstrates some of the ancillary benefits that licensing can provide, such as reduced search costs when trying to find a competent practitioner, government officials aren’t in a position to determine whether those benefits are worth the higher market costs that reduced competition brings. Ultimately, the primary thing being protected is the income of a particular set of licensed professionals.
I could easily prolong this post, but interns at the Show-Me Institute don’t get that long of a break. So excuse me while I go to Kansas to get a massage — it’s been a loooong day!
Attention All Ears (of Corn): Ethanol Mandate Could Be Repealed*
Although a few free-market ideals have been coming from Jefferson City recently, one in particular caught my eye — a bill having to do with ethanol. The Richmond Daily News reports on a bill in the works that, if passed, would remove the ethanol mandate from Missouri law. The article makes many great points, the best of which is its citation of the Show-Me Institute’s ethanol study.
Ah, now there’s a thought — living in Missouri without a ethanol mandate. Already, Missourians are getting a glimpse of this eventuality every time the price of gasoline prices drop below the price of ethanol. Hopefully, we are on our way to having a choice of whether or not we want ethanol in our engines.
*Former Show-Me Institute intern Pat Eckelkamp contributed this terrible pun of a title.
