It’s a common problem that can cause real difficulty for anyone whose job demands aren’t always flexible, but do we need the government to fix it? Here are how some employers have chosen to deal with the issue: Companies including General Mills and Starbucks now offer a backup childcare benefit, and Best Buy recently began rolling out a new program that helps parents by giving them 10 days of subsidized childcare a year that they can access quickly through Care.com. The only cost to parents is a $10 a day co-pay.

Such programs can help both companies and their employees: The company doesn’t lose productivity from workers having to stay home, and employees don’t have to use up valuable vacation or sick days to attend to their kids when other plans fall through.

It’s a win–win scenario—a private-sector solution based on a voluntary, mutually beneficial arrangement. And it doesn’t require government intervention in the form of subsidies, which would require a decision about whether to pay for them in higher taxes or to reduce spending elsewhere. Best Buy specifically cited the lower federal corporate taxes as helping make this new backup childcare benefit possible. Wouldn’t it be better for Missouri policymakers to take a similar approach by simply making it easier for companies meet the needs of their workers?

The post Innovation in Child Care Coming from Private-Sector Employers appeared first on Show-Me Institute.

For this upcoming fiscal year (which begins on July 1), the state has appropriated close to $9.4 billion to Medicaid. This includes more than $1.86 billion in general revenue (state funds that include your income taxes and most of your sales taxes). This is an increase of close to $200 million ($110 million in general revenue) over this year. That sounds like a lot of money, and it is, especially considering that Medicaid continues to take up a larger portion of the state’s budget.

The two charts below show the effects of Medicaid growth on state general revenue expenditures:

As you can see, as Medicaid grows, other programs like higher education and the foundation formula shrink as a portion of the budget. That isn’t to say that such shrinking is good or bad, but since the state has a balanced budget amendment, appropriators don’t have much choice in the matter either way.

With Medicaid costs growing, one would understand a desire to get costs under control. However, there is a concerted effort in this state to actually expand Medicaid. My colleague Patrick Ishmael has highlighted several reasons why this would be a bad idea, but solely from a budget perspective, expanding the program would be disastrous.

We need to reform Medicaid, not expand it. Ishmael has laid out ways to improve our Medicaid system. If the state can save more on Medicaid or at least stop its growth, it would grant financial flexibility to policymakers to either spend on other important items or return more money to the people who pay the bills, taxpayers.

The post Medicaid and Why We Can’t Have Nice Things appeared first on Show-Me Institute.

A new Walmart is opening in Jefferson County. Yes, it got a TIF. The property taxes will now be frozen for all the other taxing districts. So, someone please explain to me how the school district is going to pay for educating the kids in the 180 new homes that are part of the project, when those homes will not be paying the necessary marginal taxes for the schools. Oh yeah, the school district will seek to raise taxes on everyone else . . .

Meanwhile, in more positive news, Florissant officials are set to vote next week on approving a development for a Walmart that is being built without a TIF. The Florissant City Council rejected a TIF last year, but the project is going forward because this particular plan makes economic sense. I commend Florissant officials for their discipline, and hope this serves as an example to cities throughout Missouri. This is a good opportunity to remind people that I have nothing against Walmart – just the subsidies that usually accompany it.

Finally, here is the Show-Me Institute’s latest study on the basic structure of TIF.

The post Missouri TIF Update appeared first on Show-Me Institute.

The Department of Revenue (DOR) announced that 169 cities, 50 counties, and 62 special districts will opt out of the sales tax holiday this August 5-7. The opt-out will require consumers to pay local sales taxes as enacted by the municipality or county but will leave the exemption on the 4.225 percent state sales tax in place.

But what’s the point of a sales tax holiday if municipalities can opt out?

The resulting dissimilarity in tax rates among Missouri’s municipalities distorts consumer behavior and impacts local vendors unequally. For example, vendors in municipalities that have enacted local sales taxes and have opted out will suffer because local consumers will purchase goods in neighboring municipalities that offer the full exemption. In my case, the local Best Buy lost my business due to no fault of its own.

For all price-conscious college students, we offer the following lists of cities, counties, and special districts to avoid.

Be sure to check out previous Show-Me Institute opinions about the sales tax holiday.

The post Where Not to Go on the Sales Tax Holiday appeared first on Show-Me Institute.

Yeah, it would be great if I could walk into Best Buy and come out with a 50 inch TV and not have to pay for it.

Plus, he explains economic principles. Read the whole thing.

The post John LaPlante Gets Sarcastic appeared first on Show-Me Institute.

The article says that Internet sales are on the rise for the second straight year, hitting $204 billion annually (which again is probably an overestimate), while traditional brick-and-mortar stores are continuing to lose money.  In 1992, the U.S. Supreme Court said that the state couldn’t collect a sales tax from a particular business unless it had a physical presence in that state — but Congress could lift that ban at any time. As we stand on the razor’s edge of a serious economic downturn, I believe it’s a mistake to institute new tax policy that would dampen consumer spending even more.

The article seems to totally disregard why Internet sales are up.  When the market is allowed to operate without interference, this allows a clearer view of what the invisible hand is doing. Things are cheaper online largely because they don’t involve sales tax, and are subject to fewer labor costs, but online products also often come with free shipping — and there is no added personal cost of travel to and from a store. The combination of these factors — the ease of shopping from home, paying less, and easily finding desired products — makes clear why Internet sales are on the rise. These are also good reasons for local stores to place their inventory online and lobby for lower taxes — not push for more taxes. Although placing a tax on Internet sales (whether by the local, state, or federal government) may appear to level the playing field, at least from the brick-and-mortar perspective, it really serves as a protectionist measure for local stores without benefiting consumers.

As a sidenote to the whole idea of Internet taxation, the logistics of how this would work are almost unfathomable. Would officials simply tax online purchases for traditional stores like Best Buy or Walmart and exempt purely Internet-based sales on sites like Amazon and Overstock? How would they track sales for sites like eBay and Craigslist? Are they going to send revenue agents out to track each sale?  Does the state have the authority to tax beyond its boundaries? Would this have to be a federal tax, pursuant to the Constitution’s commerce clause? Does the state realize that forcing commercial activity underground only promotes organized crime? These are are just a few things to think about when contemplating such an idea. Rather than spurring the creation of a new market for illicit online sales, the government should be in the business of fostering legitimate commerce.

The post Misery Loves Company appeared first on Show-Me Institute.