Founded in 2005 by Rex Sinquefield, Crosby Kemper III, and Michael Podgursky, the Show-Me Institute has spent two decades championing free-market solutions. With key victories like reducing Missouri’s income tax, expanding school choice, and increasing government transparency through initiatives like the Missouri School Rankings Project and the Show-Me Checkbook, the Institute has driven meaningful progress across the state.

As we look to the future, the Show-Me Institute remains committed to empowering Missourians and policymakers to build a freer, more prosperous Missouri.

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RSVP Here

Cost: Complimentary, but RSVP required.

Event Sponsored by: James G. Forsyth III, John Lamping, and Rex Sinquefield

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On April 19, 2023 the Show-Me Institute hosted Jason L. Riley, senior fellow at the Manhattan Institute and columnist for the Wall Street Journal, at the Saint Louis University Richard A. Chaifetz School of Business to discuss his book Maverick: A Biography of Thomas Sowell.

Jason L. Riley is an opinion columnist at The Wall Street Journal, where his column, Upward Mobility, has run since 2016. He is also a senior fellow at the Manhattan Institute and provides television commentary for various news outlets. Mr. Riley, a 2018 Bradley Prize recipient, is the author of four books: “Let Them In: The Case for Open Borders” (2008); “Please Stop Helping Us: How Liberals Make It Harder for Blacks to Succeed” (2014); “False Black Power?” (2017); and “Maverick: A Biography of Thomas Sowell” (2021). Mr. Riley joined the paper in 1994 as a copy reader on the national news desk in New York. He moved to the editorial page in 1995, was named a senior editorial page writer in 2000, and became a member of the Editorial Board in 2005. He joined the Manhattan Institute in 2015. Born in Buffalo, New York, Mr. Riley earned a bachelor’s degree in English from the State University of New York at Buffalo.

About the Book:

Maverick: A biography of Thomas Sowell, one of America’s most influential conservative thinkers. Thomas Sowell is one of the great social theorists of our age. In a career spanning more than a half century, he has written over thirty books, covering topics from economic history and social inequality to political theory, race, and culture. His bold and unsentimental assaults on liberal orthodoxy have endeared him to many readers but have also enraged fellow intellectuals, the civil-rights establishment, and much of the mainstream media. The result has been a lack of acknowledgment of his scholarship among critics who prioritize political correctness. In the first-ever biography of Sowell, Jason L. Riley gives this iconic thinker his due and responds to the detractors. Maverick showcases Sowell’s most significant writings and traces the life events that shaped his ideas and resulted in a Black orphan from the Jim Crow South becoming one of our foremost public intellectuals.

Event sponsored by: Show-Me Institute, the Sinquefield Center for Applied Economic Research, the Sinquefield charitable trust, and Show-Me Opportunity

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receive bona fide proposals from firms, partnerships, consortiums, etc., with the technical expertise and financial resources to enter into a public–private partnership for the long-term lease, management, operation, and development of the Airport. The Airport Lease RFP shall be in a format acceptable to the FAA and shall be appropriate for submission as part of the City’s final application document.

The Show-Me Institute filed an open records request for the request-for-proposal document (available here), the proposals the city received, and the resulting contract with the winning bid. Those 11 bids are listed below, with links to the full text of each. Note that in two cases the document we received was divided into two parts, perhaps to make electronic transmission easier. Note also that some bids contain redactions, perhaps to protect sensitive information.

• Credit Suisse proposal
• Ernst and Young proposal
• Faegre Baker Daniels proposal
• Moelis & Grow Missouri proposal (part 1 and part 2)
• Hardwick proposal
• Katten proposal
• Lazard proposal
• P3Point proposal (part 1 and part 2)
• RBC Capital Markets proposal
• Stifel proposal
• UBS proposal

The selection committee for the city chose the Moelis & Grow Missouri proposal. The resulting contract with the city is here. We note that Rex Sinquefield, the president of the Show-Me Institute, is associated with Grow Missouri.

Show-Me Institute researchers have not had the opportunity to go through the proposals, but the information is presented above for public review.

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A spokesman for the Show-Me Institute—funded in large part by St. Louis multimillionaire Rex Sinquefield, an ardent earnings tax foe—said this week that the city should stop offering tax incentives and tighten its fiscal belt. The spokesman’s claim: These subsidies are “north of $100 million a year.”

Add all of the city’s investments in economic development — through the earnings, sales and property taxes as well as direct public subsidies for projects—and it’s $77.6 million of diverted revenue this fiscal year.

That’s a big number. But it’s not close to being “north” of $100 million.

We at the Show-Me Institute have been telling this to people since we first got the numbers from the city's own finance department in February 2015. Those documents, available via the link at the bottom of this post, show that the subsidies for fiscal year 2014 are $93 million, and do not include the subsidies for Burns & McDonnell and Cerner. The latter subsidy, which the Star unequivocally endorsed, might be the biggest tax diversion in the history of the state of Missouri.

The problem is that the Star's editorial board likely only considered the city’s portion of TIF subsidies. The problem with TIF, however, is that it allows the city to divert money from other taxing jurisdictions such as schools, counties, and libraries. In short, the city is offering subsidies with other people's money.

I would welcome the opportunity to look over the documents the Star used to reach their conclusions. Do they include Cerner and Burns & Mac? Do they include bond payments on the Power & Light District and the Citadel? Do they include earnings tax subsidies given to the Star itself? How about TDDs, CIDs, Chapter 353 property tax abatements, etc? If not, then their calculation of the cost of subsidies is embarrassingly incomplete.

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As someone who studies the issue of education policy quite closely, I can tell you there are many compelling academic reasons for supporting school choice. Studies consistently show that school choice programs save taxpayers money. Moreover, students who utilize school choice programs tend to benefit academically. Although I have read tomes on the value and benefit of school choice, none have made the argument for school choice as clearly and succinctly as the recent St. Louis Post-Dispatch piece by Jessica Bock, “After Troubles at Normandy Middle, a Return to Francis Howell.”

Bock tells the story of Naomi Goodloe a seventh-grade student in the midst of the drama surrounding the interdistrict school choice program in the Normandy School District. Goodloe attended sixth grade in the Francis Howell School District. However, enabled by the State Board of Education, Francis Howell elected to not allow transfer students to return this year. Thus, Goodloe was relegated back to school in Normandy. As Bock writes:

Lorrine Goodloe believed it might be better in Normandy schools this year, and told her daughter so.

But barely two months into the school year, Naomi Goodloe has left Normandy again, bruised and now behind in her seventh-grade studies.

The path back to Francis Howell wasn’t easy. In fact, it only came as the result of a court order.

After weeks of asking to go back to Saeger [Middle School in Francis Howell], Lorrine Goodloe made phone calls and determined Naomi might still be able to get back to Francis Howell. Attorneys hired by the Children’s Education Alliance of Missouri, a school-choice organization financed by investment banker Rex Sinquefield, would go to court for Naomi’s right to return, as they have for others. The judge granted the orders based on his ruling in August that the state board had violated rules when they changed Normandy’s accreditation.

When Naomi returned to her Francis Howell school, she was greeted warmly by her friends. “Everybody gave me hugs, and they dragged me around the school, letting everyone know ‘Naomi’s back!’” she said. She is now receiving the education that she desires and the education that she deserves.

Families should not have to be passive consumers of whatever their local school is offering. Parents should be equipped to choose the school that is going to meet their needs. That is the beauty of school choice, and that is why we need to expand options for all of Missouri’s school children. If you haven’t already, read Bock’s entire piece.

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On May 16, the St. Louis Post-Dispatch editorial board invoked the historic Brown vs. the Board of Education case in a diatribe against lawmakers and the bogeyman (Rex Sinquefield). Members of the editorial board are disappointed, to say the least, with how Missouri Senate Bill 493 – the “transfer fix” – turned out. Namely, they are concerned that cutting transportation for students who transfer to other districts will limit choices. They also suggested, “The transfer fix was supposed to determine a fair amount of tuition for the sending districts to pay to the receiving districts.” Senate Bill 493, they claim, did not do that.

With all of the blame that the paper’s editorial board dished out, I was a bit surprised to find that they did not mention the real culprits standing in the way of these legislative fixes – the education establishment. In a letter to the editor, I pointed this out:

From the outset, the education lobby — the strongest lobby in the state — has fought to limit the number of students transferring out of unaccredited school districts. Thanks to lobbyists from the Missouri Association of School Administrators, the Missouri School Boards Association, and a bevy of other education groups, Senate Bill 493 was never about providing options for students. It was about neutering the transfer law.

Apparently, the editors did not take notice of my letter. Yesterday, they once again attacked lawmakers and the bogeyman. They added Kate Casas, of the Children’s Education Council of Missouri and StudentsFirst, to their list of malcontents. Yet they once again failed to mention the education lobby.

Let’s think about it for a minute. The two major problems the Post-Dispatch editors have with the bill, besides the private option, are transportation and tuition. Who would lobby to cut transportation funds? Who would lobby to keep the tuition high or not count transferring students’ test scores? I doubt any lawmaker came up with these ideas on his or her own.

Did the bogeyman, Kate Casas, or StudentsFirst suggest cutting transportation funding? Did they fight to keep tuition high?

Doubtful.

As far as these two issues go, I’m on the same page as the editorial board. In my testimony before the Missouri House Education Committee, I suggested a simple method for calculating a lower tuition. I also noted that the bill removed transportation and suggested creating a fund to pay for the expense.

If you think about this objectively, the only conclusion is that the education establishment is to blame for the major problems in Senate Bill 493.

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Of course, Taibbi knows his role in that game and plays it as best he can. But I would like to know his source on this nifty factoid (emphasis mine):

Dan Loeb isn’t the only hedge fund manager aligned with groups like Students First, the Manhattan Institute, or local anti-benefit lobbies like the Show-Me Institute (created by billionaire Rex Sinquefield to campaign against defined benefit plans in Missouri) . . .

Oh? And what actual evidence, Matt, do you have for the assertion that the Show-Me Institute — now close to a decade old — was founded for the purpose of “campaign[ing] against defined benefit plans”?

We’re waiting.

But while we wait, Matt, I did want to tell you that I found your investment advice remarkable, compelling, and ironic (emphasis mine):

A lot of teachers and public sector workers would do just as well to just dump their money on some plain-vanilla S&P index and not pay obscene tax-sheltered fees[…]. Not only would the returns probably be a wash or close to it, but retirees at least wouldn’t be stripping themselves of their biggest asset – the political power their money represents.

That is excellent advice. And you know who helped invent the first S&P index fund? Rex Sinquefield, of course. But you knew that, right?

Right?

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So what exactly is the reckless Kansas policy that the Post-Dispatch editors tell us must be avoided at all cost? First, Kansas lowered its income tax rate from 6.45 percent to 4.9 percent on individual income. For small businesses, namely those organized as S-Corporations, LLCs, Partnerships, and Sole Proprietorships, cases in which business income that is passed through to owners, Kansas eliminated the income tax altogether.

What does economics tell us about the likely effect of such a policy? For simplicity, assume that there are two main sources of income: labor and capital. The former is the payment for supplying work effort to a firm. The latter is the payment for resources that you provide to companies and is usually returned to you after the risk you face is realized. So income from loans and other assets, along with returns to entrepreneurial activity, are deemed capital income. Given that government has to raise revenues for public needs, which should be taxed more — capital or labor? In research that Christophe Chamley and Kenneth Judd conducted independently, the conclusion is unambiguous: tax rates on capital income are very detrimental. Chamley’s and Judd’s work is in line with the analysis that two Nobel Laureates put forward: Peter Diamond and James Mirrlees, who argued that taxes should be applied to the most inelastically supplied goods. Because capital is so mobile, its supply is very elastic and the optimal tax rate on capital income is zero.

Ironically, the editors at the Post-Dispatch accept that people on the Kansas border are very mobile, just not in response to taxes. They argue that people move from Missouri to Johnson County, Kan., because of school quality. The unstated premise is that these people still work in Missouri. Will a substantial tax nudge not lead to even more people seeking out those Johnson County schools? Or, more importantly, induce employers to plant businesses where their employees want to live?

The issue for policymakers is this: for a given level of state revenue, what set of tax policies will yield the revenues while doing the least economic damage? Kansas is trying an experiment. There is an economic rationale for this experiment. If you have to tax income, there is good reason to try to separate out taxes on labor income from taxes on capital income, because capital is highly mobile. In spite of the editorial board’s heated rhetoric, the economic fundamentals favor Kansas on this one.

Joseph Haslag is chief economist and Michael Podgursky is a co-founder and director of the Show-Me Institute, which promotes market solutions for Missouri public policy.

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But the Post-Dispatch’s readers deserve better than what the newspaper delivered Saturday. There is nothing “theological” about the proposition that income taxes are destructive to growth. For the sake of transparency, I encourage the Post-Dispatch to point its readers to a report summarizing the academic literature on taxes and growth that the Tax Foundation published last year. Notably (emphasis mine):

So what does the academic literature say about the empirical relationship between taxes and economic growth? While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions, and monetary policy. In this review of the literature, I find twenty-six such studies going back to 1983, and all but three of those studies, and every study in the last fifteen years, find a negative effect of taxes on growth. Of those studies that distinguish between types of taxes, corporate income taxes are found to be most harmful, followed by personal income taxes, consumption taxes and property taxes.

The Show-Me Institute will continue to advocate for substantive reforms to improve the economic fortunes of this state. Instead of deriding that movement, the Post-Dispatch should join the good-faith effort — which a constellation of countless citizen activists are spearheading in Missouri with assistance from Show-Me Institute research — to translate the outcomes of decades of economic research into a robust and prosperous economic reality. We invite the Post-Dispatch to join us in this pursuit.

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Not unexpectedly, Kansas Gov. Sam Brownback received an “A” — in fact, the only “A” among the states that border Missouri. Edwards makes particular note of the massive tax cuts Brownback enacted this year, lowering personal income taxes and ending taxation on income derived from certain businesses. As Rex Sinquefield and I observed last Friday, that move was a big, big play for Missouri businesses that the state must address. Edwards also highlights the fact that Brownback “signed into law needed pension reforms for state workers, and he has abolished some state agencies.” The governors in Nebraska, Oklahoma, and Iowa also earned good grades, each scoring a “B” on Cato’s report card. It is worth reiterating: This is all occurring on Missouri’s doorstep.

And Missouri’s governor? Citing in part “Tax Credits as a Tool of State Economic Development Policy” — a Show-Me Institute study — Edwards assigned Gov. Jay Nixon a grade of “C,” noting that while taxes have not really risen in the state, “tax incentive disease runs rampant in Missouri, as it does in many states.” (Indeed, Missouri’s love affair with tax incentives is unfortunately bipartisan.) Interestingly, the ratings of governors in our nine-state region, generally speaking, get worse the farther east you go.

You can find Cato’s full study here.

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I thought that we as a state were making steady progress toward that end. As I see it, there have been a number of real pluses:

• Over the past couple years, the Missouri legislature responded to a challenging fiscal environment with responsible spending cuts, as opposed to harmful tax increases;
• Missouri is home to a robust Tea Party movement; and
• Missouri fielded a bumper crop of candidates espousing strong free-market principles during the November 2010 mid-term elections.

But now I am wondering how much progress we have really made — given what seems to me the complete abandonment of principle by some self-described conservatives in the legislature. These so-called conservatives have thrown their support behind the proposed bill to grant $360 million in tax credits for the supposed purpose of creating a “China Midwest Hub” or “Aerotropolis” at Lambert-St. Louis International Airport.

This legislation — which may be considered at a special session of the legislature in September — would spawn the largest tax credit subsidy in Missouri history.

The proposed bill is also the epitome of bad public policy. Let me count some of the ways that it fails the test of serving the public good:

• It would take from the many (basically, all Missourians who pay income taxes, as individuals or businesses owners) and give to the few (mostly to owners or developers of warehouses and real estate in designated areas near the airport, some of whom have already received or are in line to receive substantial tax credits);
• The legislation is being rushed to a vote in the absence of anything resembling a serious cost-benefit analysis — and in the absence of any proof the Chinese government or ANY major air carrier is committed to a plan to turn Lambert into a major air cargo hub;
• It therefore represents a huge (and completely misplaced) leap of faith in the ability of our legislators to outsmart and outthink the marketplace in putting taxpayers’ money at risk.

In a positive development earlier this year, top business leaders in the Kansas City metropolitan area called on the governors of Missouri and Kansas to declare an armistice in a senseless “border war” over the use of economic development incentives to poach jobs from one side of the state line to the other. The two-way traffic of companies chasing tax credits has depleted tax revenues in both states without a net increase in wealth or employment. We should all give thanks for this outbreak of common sense.

Now, however, supporters of the Aerotropolis legislation would have us believe that it will create thousands of jobs in the Saint Louis metropolitan area and generate nearly $34 billion in economic activity over a 20-year period — paying back the original investment in taxpayers’ money more than 100 times over. Why, then, is the smart money (private capital) staying on the sidelines? Why hasn’t it acted on its own — given the supposedly fabulous returns cited by supporters?

The answer is clear: The underlying economics is not there. Heavily promoted “investment opportunities” predicated on tax credits or other subsidies are almost always accidents waiting to happen.

A dozen or so years ago, we were told that subsidizing a new runway at Lambert would bring new traffic, and it didn’t. We were also told the Mid-America Airport — deeply subsidized on the Illinois side — would bring huge traffic. Now there is just one subsidized cargo flight a week out of the entire airport.

Karl Marx (not normally someone I quote) said that history repeats itself, “first as tragedy, then as farce.” Let’s hope that history is not about to repeat itself with the misconceived and hugely expensive Aerotropolis legislation.

R. Crosby Kemper III is chairman of the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

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As the policy analyst leading the Show-Me Institute’s research of the Aerotropolis proposal, I would like to respond to Hartmann’s allegations.

I have never worked on a Republican campaign, in any way, for pay or otherwise. Nor have I worked on a Democratic campaign, in any way, for pay or otherwise. But, in case Hartmann is curious, I have made informational presentations to both Democrats and Republicans who are concerned about the Aerotropolis tax credits.

In fact, this issue is very bipartisan. For example, Rep. Jill Schupp, D-Creve Coer, has voiced concerns about the tax credits, and said that she is working with a group of more than a dozen other democrats on ways to change the bill. On the other side of the aisle, Sen. Jason Crowell, R-Cape Girardeau, has written scathing missives about the tax credits.

As a staff member at the Show-Me Institute, I am thrilled that one of our founders chose to publish an op-ed calling out Republicans who say that they are for fiscal responsibility, but then work to create handouts for a small group of developers and warehouse owners in the St. Louis area. Accountability is needed in state politics, and for members of both political parties.

Hartmann searched the Show-Me Institute website for “tea party” and found three references. I am not sure, but from his writing it seems that Hartmann was looking to find a relationship between the Show-Me Institute and a political party. A search of the St. Louis Magazine website results in many more references to the tea party, but any attempt to tie that finding to a relationship between the magazine and the tea party would be similarly as absurd.

Hartmann also seemed intent on denigrating Rex Sinquefield, co-founder of the Show-Me Institute. For the record, the Show-Me Institute has hundreds of donors. We are more than a single board member or co-founder. Staff members choose what public policies to take on, and what projects to pursue. That all being said, I don’t understand how Hartmann could take offense at an active-minded citizen advocating for more effective government. What exactly is wrong with that?

Finally, I would like to extend an offer to Hartmann: I am happy to meet him at any time to provide an information briefing about the Aerotropolis legislation. The Aerotropolis tax credits — from an economics and corporate welfare perspective — are clearly problematic. Hartmann himself, in an earlier column, wrote that he too has misgivings about the Aerotropolis proposal. The only reason he supports these credits is:

Aerotropolis backers claim that the way the state program is structured, not a dime of Missouri tax credits will be given out on the come. Tax credits will only flow after the Chinese planes start landing, and the revenues (and presumably jobs) actually arrive.

This statement is demonstrably false. Under the legislation, tax credits could be awarded if no increased international trade occurs, and in fact could go toward subsidizing business as usual. Proponents have not fixed this loophole, and have not responded to this point.

Considering the facts, perhaps Hartmann might find himself agreeing with the Show-Me Institute.

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