According to Reid Wilson at The Hill,

The incentive package passed by Wisconsin’s GOP-controlled legislature, during a special session last August, will offer the company $1.5 billion to offset payroll costs and another $1.35 billion for capital expenditures. The state will give Foxconn $150 million in sales tax exemptions on construction materials, and it plans to spend a quarter of a billion dollars on road improvements near the new factory.

The town of Mount Pleasant, where the factory will be located, will offer $763 million to help pay for the project, and Racine County gave the company $50 million to acquire the land.

In total, Wisconsin, Racine County and Mount Pleasant gave the company nearly $4.8 billion in tax breaks, incentives and taxpayer dollars for improvements. If Foxconn delivers all 13,000 jobs it has promised, that works out to about $370,000 per job.

This is reminiscent of a similar deal for Carrier manufacturing plant for Indiana, of which my colleague Patrick Ishmael wrote in 2016,

I certainly hope the Carrier “deal” doesn’t presage future deals the President Elect will be cutting over the next four years. The reason is straightforward. In return for not following through on its threat to move, Carrier will receive $700,000 per year from the state of Indiana, for at least 10 years. If that kind of cronyistic deal sounds familiar to you, it should; the Carrier agreement is like many of the “deals” to “save or create jobs” that have been made, and that we have criticized for years, here in Missouri.

Across the country, those hungry for increased economic activity seem to understand that taxes are too high to spur development. Whether it is Foxconn in Wisconsin, Carrier in Indiana, Boeing in Missouri, or Amazon everywhere, legislatures are bending over backwards to give special treatment to those they deem worthy. Better public policy demands that government stop picking winners and instead lower taxes for everyone.

The post Wisconsin’s Foxconn Deal is Bad Public Policy appeared first on Show-Me Institute.

In just 20 years as a public company, it has experienced a thousand-fold growth in sales – going from $148 million in 1997 to $138 billion in 2016 and a projected $160 billion in the current year. Adjusted for splits, the price of the stock has gone up 200-fold – from a high of $5 a share in 1997 to $1004 a share today.

To paraphrase the bard, Amazon doth bestride the narrow world of retailing like a colossus. Others quake at its every movement. Back in June, when the company announced the acquisition of Whole Foods, the stocks of other grocery chains plummeted – with Kroger falling 26 percent in the two days following the announcement and SuperValu down 16 percent. Wal-Mart fell 5 percent. Within days, Amazon’s market cap went up nearly as much as the $13.7 billion it agreed to pay for Whole Foods.

In many years of writing about business and economics, I can think of no other enterprise that has come so far so fast. Even so, waxing biblical in your 2016 letter to shareholders, you said it is still “Day 1” (the first day of creation) in the company’s evolution. When someone asked you at a recent “all-hands meeting” what Day 2 would look like, you answered:

Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.

Your words prompt me to warn you that Day 2 may be approaching much more quickly than you think. Surely you don’t want to turn Amazon into a subsidy junkie. If that happens, Day 1 will turn into Day 2 in the blink of an eye.

Right now, cities and states across the country are competing with one another to throw big money – taxpayer money – at Amazon in the hope of being chosen as the site for Amazon’s proposed second headquarters. With one hand, you dangle the promise of up to 50,000 jobs paying an annual average of more than $100,000 per employee. With the other, you rattle a tin cup, stating in your request for proposals:

Incentives offered by the state/province and local communities to offset the initial capital outlay and ongoing operational cost will be significant factors in the decision-making process . . . . Outline the type of incentive (i.e., land, site preparation, tax credits/exemptions, relocation grants, utility incentives/grants, permitting, and fee reductions) and the amount. The initial cost and ongoing cost of doing business are critical decision drivers (emphasis added).

A few years ago, Boeing Commercial Airplanes, your cross-town neighbor in Seattle, initiated a similar nationwide bidding war for production of its latest big new wide-body – the 777X. In the end, Boeing decided to keep production at its massive facility in Everett, Washington – but only after winning nearly $9 billion in tax breaks and subsidies from the state legislature. That worked out to more than $1 million per promised job, or about $50,000 per year per job over a 20-year period (the tax breaks do run out eventually).

Maybe that sounds great to you. From your perspective, it may seem like the equivalent of having local and state governments pick up half of the anticipated HQ 2 payroll for a long time.

But think of the downside of making Amazon and its people deeply dependent upon corporate welfare. Think of the gross unfairness of huge tax carve-outs for Amazon that are denied to other smaller businesses (which have to pay for their initial costs and ongoing costs out of their own hard-earned dollars). How do you want your company and its people to succeed – by winning in the marketplace . . . or by securing a fatter portion of government largesse?

Last but not least, think of the hypocrisy of preaching a gospel of “obsessive customer focus” as the key to maintaining “Day 1 vitality,” while gouging money out of taxpayers. According to Consumer Intelligence Research Partners, there are now about 85 million Amazon Prime members – that’s 68 percent of all U.S. households! As Amazon becomes increasingly ubiquitous, most of every dollar that Amazon takes out of taxpayer pockets will be money stolen (or lifted) from its own customers.

As one of your customers told me, “I am never in favor of using my tax money to build someone else’s business so that it can sell products to me and profit off me a second time.”

The post Beware the Perils of Corporate Welfare: An Open Letter to Jeff Bezos appeared first on Show-Me Institute.

Here we go again, I thought – another episode in the long-running story of local and state political figures being played for suckers in offering special tax breaks and subsidies to a major corporation with a much-ballyhooed plan for moving work to another city and state.

In 2013, Boeing decided to shop the production of a new airliner (the 777X) to other states after the local International Machinists Union in Washington state voted 2-to-1 to reject Boeing’s offer of an eight-year contract. Keen to wrest this piece of work away from Boeing’s giant facility in Everett, Washington, then-Missouri Gov. Jay Nixon and Saint Louis County officials were gung-ho participants in the bidding war, which involved 22 states and about twice as many cities.

They quickly put together a package that would award $3.5 billion in tax cuts and tax credits to Boeing, mostly over a 10-year period. A substantial portion of those tax credits would have been transferrable – meaning that Boeing could have sold them for cash to other companies wanting to shelter income in Missouri.

Boeing was promising up to 8,500 high-paying jobs. Though that may sound like a lot, it amounted to just 0.3 percent of total employment in Missouri. Where was the fairness (or the economic logic) in lavishing so much public assistance on one company – and less than half of one percent of the workforce – while implicitly increasing the tax burden on thousands of other companies and millions of other workers? In the end, Boeing decided to keep production in Everett – but only after the Washington state legislature approved $8.5 billion in tax breaks and subsidies for Boeing. The Seattle Times called it “the largest state-tax subsidy to one company in American history.”

History repeats itself – with Amazon replacing Boeing in what promises to be another bidding war for high-paying jobs. Once again when asked to jump into the game with tax breaks and subsidies, local and state officials – here in Missouri and pretty much across the nation – are all too ready to oblige. They do not question whether they should be in the game; they only ask: How high do you (Amazon) want us to jump?

Wherever it goes with its second headquarters, Amazon is plainly looking for a ton of corporate welfare – almost certainly in the many billions of dollars. Its request for proposals states:

A stable and business-friendly environment and tax structure will be high-priority considerations for the project. Incentives offered by the state/province and local communities to offset the initial capital outlay and ongoing operational cost will be significant factors in the decision-making process . . . Outline the type of incentive (i.e., land, site preparation, tax credits/exemptions, relocation grants, utility incentives/grants, permitting, and fee reductions) and the amount. The initial cost and ongoing cost of doing business are critical decision drivers.

In this case, what is good for Amazon is not good for the country – or for the state of Missouri. Let Amazon pay the “initial cost and ongoing cost of doing business” out of its pocket, just as other businesses do. Corporate welfare is a curse, not a cure.

The post Corporate Welfare: A Curse, Not a Cure appeared first on Show-Me Institute.

Bombardier, the Canadian transportation company, said on Wednesday that it would lay off about 7,000 employees over the next two years, as it struggles to find buyers for a new series of planes that for the first time put it in direct competition with the aviation giants Boeing and Airbus….

While the Air Canada sale provided important help for the CSeries, sales of the aircraft remain below levels that analysts generally view as assuring the project’s success. Including the 45 planes for Air Canada, Bombardier now has 288 firm orders.

Making money in business is never a certainty, and yet time and again state and local officials seem to think they have a special insight for picking moneymakers when they don’t. Whether you’re talking about developing a hotel, a stadium, an airport, or something else, the incentives of politicans often diverge greatly from the long-term interests of the communities they’re supposed to represent. It’s fun to cut the ribbon at a groundbreaking and get your picture taken with a hard hat on, but who ends up with the bearing the burden when an incentivized business goes belly-up? Taxpayers, that’s who.

Fortunately, it wasn’t Missouri’s taxpayers who paid the price when Bombardier’s incentive-addled business plans crash-landed, and state officials should learn from having dodged that bullet. Rather than riskily cutting deals with a select few, policymakers should invest in every family and business in the state by simply lowering everyone’s taxes. 

The post Bombardier’s Troubles Continue As Company Lays Off 7000 appeared first on Show-Me Institute.

It's been said time and again that the Kansas City Royals have succeeded by playing small ball; focusing on base hits, keeping the runs coming. There is no dependence on big personalities, and hopes aren't pinned to a dramatic swing for the fences to win the game. The Royals charted their own course, built on their own strengths, and delivered a product no one else could.

Kansas City government—and Missouri government in general—could learn a lot from that. Instead, city leaders engage in the municipal me-tooism of convention hotels, streetcars and airports. We pin our hopes on big plays (Boeing tax credits, Power & Light District) and neglect the basics (deferred maintenance on neglected infrastructure, diverting funds from schools, libraries, sewers, public safety). As a result, the City of Fountains cannot afford to maintain its fountains. 

The post What Kansas City Can Learn From the Royals appeared first on Show-Me Institute.

From the release:

Boeing, a top recipient of federal grants, tax credits, loans, loan guarantees and bailout assistance, received more state and local subsidy money than any other company. In 2013, Boeing got the largest tax break awarded to a single company in any state’s history: $8.7 billion, an enticement for the company to build its 777X plane in Washington state. The company told state lawmakers it would pursue other options if it didn’t receive a sweet deal from the Legislature, along with concessions from workers.

My colleagues at the Show-Me Institute have written about corporate welfare packages directed at Boeing before. See Exhibit B:

• Outrageous: After Denying You Tax Cuts, State Officials Return Monday To Give Boeing One Instead
• The Finer Details Of The Boeing Incentive Package
• Education Establishment On Boeing Tax Subsidies: Crickets
• It’s Official: Boeing To Keep 777X Construction In Washington State

With free-market think tanks and government unions both critical of corporate welfare, it’s surprising that the states haven’t done a better job of addressing issues like TIFs, tax credits, tax abatements, enterprise zones, public stadium funding, et cetera.

Depending on who you ask, Missouri is one of the top states in corporate welfare. I hope we can all agree: This needs to change.

The post Finally Some Agreement: Get Corporations Off the Dole appeared first on Show-Me Institute.

Are you listening, Missouri lawmakers? This is the Ghost of Christmas Past. I am calling on you to mend your ways and adopt a whole new set of economic policies to replace the failed policies of the past two decades.

Yes, my friends, it is time for you to admit that what you have been doing—in spending billions of dollars of taxpayers’ money to subsidize commercial projects for the benefit of big, cash-rich companies such as Boeing, Cerner, Capri Casinos, Wal-Mart, and Whole Foods—has been a ghastly mistake.

In the 16 years from 1997 through 2013, Missouri has trailed every other state in the nation but one in average annual economic growth. Missouri ranked 49th out of the 50 states in growth of state gross domestic product—just ahead of bottom-dwelling Michigan.

And that is despite (or, I would say, because of) the fact that you have turned Missouri into one of the nine states considered the “corporate welfare kings of America.” According to the Mercatus Center at George Mason University, Missouri has committed more than $5.2 billion in state and local subsidies to private businesses over the past two decades. That is more than all but eight other states.

What else can I say to convince you of the urgent need for change? Well, perhaps some specific suggestions would help.

Here are five New Year’s resolutions for making Missouri a better place to live and work and grow a business:

• Stop putting the public sector cart in front of the private sector horse. That is to say, begin with the recognition that all the private sector really needs to create wealth and jobs is competition and freedom of choice. It doesn’t need central planning and controls, which have the opposite effect of stifling individual initiative and economic growth.
• Abolish the Missouri Department of Economic Development (DED) and return the money that the DED passes out in targeted tax credits for economic development (about $400 million a year) to everyone (not just the politically selected few) through broad-based cuts in the state income tax for individuals and businesses.
• Take advantage of a wealth of opportunities across the state to enlarge the private sector and shrink the public sector through privatization. That is what Arnold did recently in selling its publicly owned and operated sewer system to a private contractor for $13.2 million—allowing the city of 20,000 people to pay off $8 million in sewer bonds and devote another $5.2 million to other public improvement. Better yet, under private ownership, the sewer system will go on the tax rolls and help pay for schools and other public services.
• Make greatly increased use of tolls on Hwy. 70 and other major roadways and bridges. Tolls are an extremely efficient tax, and—as a result of new technology—they are readily collectible without toll booths or other inconvenience to people using the roadways. In fact, through variable tolls, the Missouri Department of Transportation could—at minimal cost—guarantee drivers congestion-free traffic flows at all hours of the day on major roadways and bridges.
• Finally, look to what neighboring states are doing in reorienting their tax structures and put Missouri in the forefront of states that are pursuing pro-growth, pro-economic freedom reforms.

In the Christmas spirit, I urge you to make all those changes—knowing that you will wake up shortly wanting to fix the problems that have kept Missouri from reaching its full potential.

Andrew B. Wilson is a resident fellow and senior writer at the Show-Me Institute.

The post New Year’s Resolutions for Missouri Lawmakers appeared first on Show-Me Institute.

Tax credits and enterprise zones are among the items included in calculating the total amount of subsidies provided to these companies. We have written extensively on how these and similar programs do not generate the type of growth that supporters of these programs claim. Unfortunately, policymakers seem to be big fans of these types of subsidies, as are the companies that benefit from receiving them.

Guess which company is the biggest beneficiary of corporate welfare. I’ll give you a minute. Need a hint? They build airplanes. Give up? I’ll show you.

Boeing collects more in corporate welfare than the next two companies combined. Missouri did its part in improving the company’s bottom line when it gave Boeing a massive handout so that it would locate additional aircraft manufacturing here. However, the state is unlikely to get enough money in return in order to justify these subsidies. To generate sufficient returns, Boeing’s investment in the area would have to be in excess of what they made in profits for all of last year. Color me skeptical that they’ll make an investment that large.

Instead of giving out all of this taxpayer money to specific businesses, why doesn’t the government just cut taxes for all businesses? The state would make itself more attractive to businesses, and it would avoid the management problems that occur with these tax credits.

The post Missouri Is One of the Top States . . . in Corporate Welfare appeared first on Show-Me Institute.

Missouri is not a “low-tax state” yet, but today’s vote is a welcome opening salvo to get us there.

The post We Have A Tax Cut: Missouri Legislature Overrides Governor’s Veto appeared first on Show-Me Institute.

• The top tax rate is cut by .1 percent per year if state revenues increase by $150 million. Once fully phased in, the new top tax rate will be 5.5 percent.
• Tax brackets are to be adjusted for inflation.
• Business owners who pay their company’s taxes at the individual level will be able to deduct 5 percent of their business’s income. This deduction will increase by 5 percent every year until it reaches 25 percent.
• Creates an additional $500 personal exemption for people with incomes less than $20,000.

Nixon already denounced the legislation and will likely veto the bill. He has trotted out the same talking points he used when he vetoed last year’s tax cut. “Once again, members of the legislature have chosen to ignore evidence that Missouri is already a low-tax state — sixth lowest in the nation,” Nixon said. I guess the governor felt that Missouri’s taxes weren’t low enough for Boeing when he signed a $150 million incentive package for the company to move manufacturing jobs here. Also, Missouri is not a low-tax state, particularly when it comes to income taxes.

You probably also will hear progressive groups complain that passing this bill will blow a hole in our budget and seriously harm state revenues. That’s what the Missouri Budget Project is doing. However, the group doesn’t show its arithmetic in its report. This is par for the course for the Missouri Budget Project and the “report” isn’t very useful for actually discussing the bill’s merits.

I’m glad the legislature is trying to cut taxes. I prefer more significant cuts (such as fully eliminating the individual and corporate income taxes). However, I’ll take any forward progress in cutting taxes. Hopefully, this time, the cuts will get enacted.

The post Here We Go Again . . . appeared first on Show-Me Institute.

But those, of course, aren’t the only bills I’m following, and on Wednesday, another piece of legislation — a big tax cut — cleared its first hurdle in the House. That bill, HB 1253, is a stripped-down version of last year’s Broad-Based Tax Relief Act. The new bill gets back to the basics, cutting taxes for businesses of all sizes by half over a five-year period (assuming the revenue triggers are made annually, of course.) I expect that simplicity will serve the bill well, and so it was not surprising that the bill received significant backing from the chamber yesterday with a 104-48 vote.

We have talked repeatedly about how destructive income taxes, and particularly taxes on business income, are to growth. It is good to see the legislature responsibly moving forward to lift the tax burden on the family businesses in our communities, just as it was so willing to do for Boeing just a few months ago. Long way to go, but this is a start.

The post Significant Tax Cuts March Forward In Missouri House appeared first on Show-Me Institute.

Last year, Missouri’s General Assembly passed and the governor signed legislation that would provide $1.7 billion in tax incentives to Boeing conditional on the company locating all or part of the assembly plant for the 777 aircraft in Missouri. In January 2014, Boeing reached a deal with the key unions in the state of Washington and decided to continue manufacturing the Boeing 777 there.

In this post-mortem review, the emphasis will be on the process used to justify the Missouri tax incentive package. In particular, the governor proclaimed that this deal would generate an additional $2.9 billion in state revenues, thus more than paying for the costs of the tax incentive package. Quantitative analysis is imperative for a society to make good public policy decisions. Unfortunately, it is imperative that transparency is part of the quantitative analysis. In short, how did the governor arrive at the $2.9 billion figure?

Read the full essay:

The post Justifying Boeing: A Post-Mortem Analysis On The Process appeared first on Show-Me Institute.

A year ago at this time, Missouri Gov. Jay Nixon railed against the state’s out-of-control, multi-billion dollar tax credit system, using 150 words and six paragraphs to stress his concerns. In this year’s “State of the State address,” delivered on Tuesday night, he devoted all of 18 words – one sentence – to the issue.

That is one unfortunate change. It is not the only one.

It seems the governor has had a change of heart regarding tax policy. After vetoing last year’s tax cuts for all businesses and individuals, Gov. Nixon led the charge to promise nearly $2 billion of new tax incentives to just one company, Boeing. That bid failed.

But if, as we often are told, Missouri is a “low-tax state,” why would we have to make Boeing’s taxes even lower? And why should the state support corporate handouts to one company, but actively deny them to the family businesses in our communities?

Second, the governor is promoting a costly expansion of Medicaid rather than what is really needed – which is substantial reform of the program. Not only is the current Medicaid program wasteful, but the access and quality of care available to Medicaid enrollees is deplorable. To make matters worse, a recent study found that expanding Medicaid may actually increase, not decrease, costly emergency room use, driving our health care costs even higher.

We should be reforming this multi-billion dollar program, not making it bigger.

Many of the other policy prescriptions of the State of the State address are beset by the same philosophical infirmities of the tax and health care plans.

For example, it is not how much money we spend on education that really matters; it is whether we are spending that money effectively and efficiently. Education funding has soared upward over the last few decades, and yet in terms of student achievement, our children remain stuck in the middle. Our kids deserve to have the best education, and one of the best ways to do that is through school choice and competition.

The governor’s address made no mention of such reforms – his focus was on simply spending more.

That is wrongheaded. Wide-ranging reform, not wide-ranging new spending, should lead the state’s agenda in 2014. I hope that is what we will see instead.

Patrick Ishmael is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Reform, Not Spending, Should Top Agenda appeared first on Show-Me Institute.

Missouri, in fact, is not a low-tax state, not in the taxes that matter most for a state’s economy.

The governor also laments that our taxpayers are forced to pay for health reform in other states through our federal taxes. He says that by expanding Medicaid, we could get some of that money back. This is a strange argument for a governor of Missouri to make considering that over a 20-year period, Missouri received more in federal spending than it paid in taxes. That means Michiganders and New Yorkers have been paying to improve our schools and our health care. Does the governor think they are entitled to a refund?

The truth is that there isn’t much evidence showing that Medicaid actually improves the health of poor people.

The legislature is in a new session and the state is facing serious challenges. But instead of spending more money (and the governor wants to spend a lot more), the state should focus on significant reform.

The post Having It Both Ways appeared first on Show-Me Institute.

First, the governor is moving in precisely the wrong direction on tax policy. In his speech, the governor congratulated the legislature for creating nearly $2 billion in refundable tax credits for Boeing last year. “We didn’t win the biggest prize,” the governor said of the state’s failed bid, “but we competed at the highest level.”

By and large, tax credits are ineffective and inefficient to promoting substantive growth — risky experiments, if you will — and last year, the governor said about as much. In his 2013 address, the governor railed against the state’s out-of-control, multi-billion dollar tax credit system for six paragraphs. In 2014, he devoted all of 18 words — one sentence — to the issue, and held up what could have been the biggest giveaway of taxpayer money in state history as an example of progress, not regression.

But that’s what it was: regression. Why should the state support corporate handouts like the one for Boeing, but actively deny tax relief to the family businesses in our communities?

Second, substantive Medicaid reform should be the top health care issue in Missouri, not a costly expansion. The governor’s proposal would lock the state into billions of dollars in new Medicaid spending over the next decade without a plan to pay for it, and that’s a bad deal for taxpayers.

Not only is the current Medicaid program wasteful, but the access and quality of care available to Medicaid enrollees is simply deplorable. We should be reforming this multi-billion dollar program, not making it bigger.

Even the education proposal is beset by the same “spend first, ask questions later” mindset. Missouri education funding has marched upward over the last few decades, and yet in terms of student achievement, our children remain stuck in the middle. From 1992 to 2008, Missouri saw an increase in per-pupil spending of 40 percent . . . and yet student achievement has remained basically flat.

That isn’t a spending problem. Our kids deserve to have the best education, and one of the best ways to achieve that is through school choice and competition. The governor’s address made no mention of such reforms — his focus was on simply spending more. That’s wrongheaded.

Wide-ranging reform, not wide-ranging new spending, should lead the state’s agenda in 2014. I hope that is what we will see.

The post One Last State Of The State Post-Mortem appeared first on Show-Me Institute.

The 51-to-49 [%] ratification of the contract [by Washington’s machinist union] ends a nationwide search by Boeing for a new manufacturing home for the planned 777X, a 350- to 400-seat jetliner scheduled for delivery in 2020, and its carbon fiber composite wings. Twenty-two states had offered 54 sites for Boeing to evaluate, each hoping to win potentially thousands of high-value aerospace jobs.

With the approval of the union, the chief executive of Boeing’s commercial unit, Ray Conner, confirmed that the 777X and its wings would be built in Washington state.

“The future of Boeing in the Puget Sound region has never looked brighter,” Conner said. “This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

The Missouri Legislature opened a very special session just for Boeing to lure production of the 777X to the Show-Me State, and the state and Saint Louis County together offered more than $3 billion in tax incentives to the aviation giant. Although the Left was largely silent on the matter, the Show-Me Institute repeatedly criticized the cronyism of the proposal — a proposal that followed hot on the heels of a failure to pass broad-based tax cuts only months before.

If the state has billions just lying around for economic development, then the case for cutting taxes in 2014 is even stronger than it was in 2013. And thanks to the special session, practically every policymaker in Jefferson City is now on the record as endorsing tax cuts for businesses to spur economic growth. If big tax cuts are good enough for Boeing, big tax cuts are good enough for the rest of Missouri’s job creators.

The post It’s Official: Boeing To Keep 777X Construction In Washington State appeared first on Show-Me Institute.

David Stokes’s previous appearances with McGraw Milhaven:

• on the recent privatization of the gift shop at the St. Louis Botanical Garden (2/17/14)
• on his new case study which documents examples of privatization from across the state (2/10/14)
• on new credit card parking meters in St. Louis and the ongoing legislative session in Missouri (2/3/14)
• on government subsidies in St. Louis (1/27/14)
• on a government subsidy that Kirkwood turned down (1/13/14)
• on the horse-drawn carriage industry (1/6/14)
• on the St. Louis land bank–the Land Reutilization Authority (LRA) (12/23/13)
• on the Affordable Care Act (12/16/13)
• on a proposal to give $150 million in corporate welfare for Boeing (12/2/13)
• on a proposed South County connector a toll road (11/25/13)
• on property tax exemptions for non- and for-profit nursing homes (11/18/13)
• on the failed vote to unincorporate Uplands Park (11/11/13)
• on the vote to unincorporate Uplands Park and a ballot measure to increase taxes in the Pattonville School District (10/21/13)
• on the privatization of mail delivery (10/7/13)
• on St. Ann’s permanent speed trap (9/30/13)
• on the Zoo-Museum Taxing District (9/23/13)
• on the proposed tax subsidy to move Laclede Gas two blocks (9/16/13)
• on the defeat of a tax subsidy for Walmart in Ellisville (9/9/13)
• on tax subdies (TIFs) to Bass Pro (9/3/13)
• on the closing of Augusta Bottom Rd and municipal liability (8/26/13)
• recounts his role in exposing the taxi-cab scam (8/19/13)
• on the defeat of a tax increment financing (TIF) proposal in Crestwood (7/29/13)
• on how St. Louis county schools will incorporate transfer students from failing districts (7/15/13)
• on students in failing schools have the opportunity to switch schools (7/8/13)
• on St. Louis city’s fee and licensing of street performers (7/1/13)
• on patronage jobs in the St. Louis Treasurer’s office (6/24/13)
• on user fees for photographers at St. Louis county parks (6/17/13)
• on reforming city manager rules (6/10/13)
• on zoning and its alternatives (6/3/2013)
• on speeding tickets, parking meters, and why we should get rid of the penny (5/28/2013)
• on the recently completed legislative session (5/20/2013)
• on property assessments (5/6/2013)
• on Missouri’s alcohol distribution laws (4/29/2013)
• on sales taxes (4/22/2013)
• (3/25/2013)
• (2/11/2013)
• on the funding of Missouri roads (2/4/2013)
• (1/28/2013)

The post Show-Me with McGraw Monday Mornings 550 KTRS appeared first on Show-Me Institute.

It makes your head spin! Two months ago, Gov. Jay Nixon vetoed a bill that would have provided some tax relief for all Missourians. Today he is calling for a gigantic tax cut — amounting to an estimated $150 million a year or $1.5 billion over the course of a decade — for one company.

The governor is hoping that would be enough to entice the Boeing Company to locate its 777X commercial airplane assembly plant in north St. Louis County.

In vetoing House Bill 253 earlier this year, Nixon went around the state arguing that cutting state income taxes for individuals and corporations would harm education and mental health. Where is the same concern today in offering a lavish gift to a single, deep-pocketed company?

If Boeing is short of the cash needed to build the new airliner, you wouldn’t know it from its generosity in compensating its top executives. In 2012 Boeing CEO Jim McNerney received $21.1 million in compensation — or 469 times the median family income in Missouri. J. Michael Luttig, the top lawyer at Boeing and a former federal judge, had $9.6 million in compensation in 2012 — or 214 times the median family income in Missouri. No doubt the Boeing general counsel is highly skilled in minimizing taxes (Boeing reportedly paid no federal taxes from 2008 to 2010) and maximizing tax rebates and other forms of corporate welfare.

How much should a state (and Missouri is just one of about a dozen states waving fistfuls of cash in trying to get Boeing’s attention) be willing to pay a company like Boeing to open a plant and create jobs?

Nixon is urging Missouri lawmakers to adopt a special tax package that would pay Boeing up to $75,000 per job per year — based on annual subsidies of $150 million spread over a minimum requirement of 2,000 jobs. No doubt that will strike some observers as money well spent — given much higher subsidy costs in other areas, such as solar energy, where federal subsidies have exceeded $350,000 per job.

Nevertheless, there are good reasons for being strongly opposed to the Boeing package.

First, it is crony capitalism and a misuse of taxpayers’ money. It makes the same mistake that many cities and town have made in cutting deals for Walmart and other big-name retailers that are not available to smaller retailers in the same community. It unfairly and unwisely diverts scarce resources to businesses with the biggest and most powerful lobbying organizations.

Second, tax credits are not free money. Our state government is supposedly straining to meet its current commitments. Every dollar that is given away in tax credits is a dollar that the state government must replace with cuts in current programs, or — more likely — increased taxation.

And third, there is a better way to promote business and job growth. Instead of chasing after Boeing and other corporate behemoths with more hand-outs, Missouri lawmakers should do something truly innovative: They should lower taxes across the board for all Missourians. That way, growth can occur organically, and in ways that politicians and lawmakers cannot even begin to anticipate.

Andrew B. Wilson wrote this article in his position as a resident fellow and senior writer at the Show-Me Institute, a free-market think tank based in St. Louis.

The St. Louis Business Journal carried a version of this op-ed in the December 13, 2013, edition.

The post Missouri Should Say No to Boeing Subsidy appeared first on Show-Me Institute.

Roger Kurtz, executive director of the Missouri Association of School Administrators (MASA), insisted that the tax cuts would take our state over the fiscal cliff. His organization sent out a document that warned each school district of the impending funding cuts that would ensue if the bill passed.

Commenting on the tax cuts, Bruce Moe, executive director of the Missouri State Teachers Association (MSTA), stated, “Now is not the time to turn our backs on our teachers and their students.”

The Missouri School Boards’ Association (MSBA) actively lobbied against last session’s tax cut bill. In recent months, they have continued warning their members about the evil tax cuts.

Not to be outdone, the Missouri National Education Association (MNEA) placed television ads against the tax cut bill:  “It’s hard to believe. Corporate special interests got an $800 million tax break, paid for by cuts to local schools.”

With the vocal opposition of the MSBA, MASA, MSTA, and MNEA to broad tax cuts and their insistence that Missouri shouldn’t cave to “corporate special interests,” we should have heard a lot from these groups in the past few weeks. After all, the legislature reconvened in Jefferson City to contemplate $150 million annually in tax subsidies to “corporate special interests.”

What did we hear from the alphabet soup of education groups?

The post Education Establishment On Boeing Tax Subsidies: Crickets appeared first on Show-Me Institute.

So there is no misunderstanding the dynamic at play here, the liberal groups promoting these stories are supported by special interests who, like their free-market counterparts, fund what they tend to believe in. In this case, what these liberal funders “believe in” generally works out to be cookie-cutter reports attacking state-based think tanks nationwide. To each her own. To be clear, that the progressive network has well-heeled supporters doesn’t bother me a bit. The Left has its patrons — check out this revealing chart from 2008 — and the free-market movement has its patrons. The Left has populist supporters; we have populist supporters.

What baffles me is why any reporter would think this “leaked” document about pension grant proposals is some sort of revelation about the Show-Me Institute, or even think tanks generally, because little if any of it is surprising even to a casual observer of the policy world. Probably the most chuckle-inducing example of the article’s shallowness is this section (emphasis mine):

Although Show-Me is open about its conservative viewpoint, the summary of the grant proposal provides a glimpse into how the non-profit charity organization works and is evidence of its ties to larger, national organizations such as the State Policy Network [SPN].

“Evidence of its ties”? The Show-Me Institute is and has been listed as a member of SPN on SPN’s own website for as long as I can remember. The way it’s being portrayed here, it’s as if the Show-Me Institute or SPN have tried to conceal the fact that we know each other and intermittently share resources. It’s like saying a letter from Kansas City Chiefs CEO Clark Hunt to NFL Commissioner Roger Goodell is “evidence of the team’s ties to the NFL.” Uh, yeah. And? Even the document that’s cited in the main article reveals that the Show-Me Institute hasn’t received even a wooden nickel from this particular grantor since at least 2009. So, what’s the story again?

And I hate to have to spell this out, but the Show-Me Institute is composed of free marketeers, not intellectual nihilists. The market-based diagnosis of the pension problem is pretty straightforward when you just look at the basic facts: defined benefit pension programs tend to hurt both the state and, in the long run, many pensioners, by cutting out market forces that would diversify risk to both the pension provider and the beneficiary. Just ask Detroit; just ask Detroit’s pensioners. That analysis doesn’t require a complete intellectual build-out from nothing, and even a cursory dive into the subject of defined benefit pensions produces an incredible amount of data from which an institution or researcher could start a well-founded and intellectually honest project.

Which is, of course, all beside the point of this story. This wasn’t so much about informing people as it was about promoting a very caustic brand of bad-faith politics — an attempt by the Left to cast aspersions on free marketeers rather than fight these important policy fights on the field of ideas.

It’s pitiable that this is the best the Left has to offer to Missourians. Heck, just look at Progress Missouri’s silence on the cronyism of the Boeing deal, which we’ve roundly criticized in print and on the airwaves over the last week. What’s their excuse for hiding rather than fighting this latest case of corporate welfare? What do they really stand for? What do they really believe in? We’d all like to know.

What does the Show-Me Institute believe in? Free markets. Who do we believe in? You. People are the market. We believe in, seek, and promote free-market solutions because we trust our fellow Missourians and Americans to make their lives and our lives better. They’re people-powered solutions. They’re solutions that work. That premise is what under-girds this organization, and I suspect our opponents find this bottom-up philosophy to be a startling threat to their top-down sensibilities — a sensibility that can’t even drag itself out of its hole to engage even an obvious and bipartisan instance of cronyism.

The post The Sorry State Of The Professional Left In Missouri appeared first on Show-Me Institute.