The study by the Pew Charitable Trusts and the Center for Building in North America found that small apartment buildings with one stairwell are just as safe as those with two. But Missouri’s biggest cities—Springfield, St. Louis and Kansas City—use building codes that require two stairways in buildings taller than three stories. That rule drives up construction costs and makes many projects financially unworkable.

These two-stair rules are based on the International Building Code, the widely adopted national standard. But they block a housing type common in Europe and now gaining traction in U.S. cities such as New York and Seattle.

The data challenge the logic of the two-stair mandate. In New York, none of the 4,440 single-stair apartment buildings built since 2012—each equipped with fire sprinklers—has been tied to a fire death caused by blocked exits. Seattle shows the same pattern: no increase in fatalities for single-stair buildings.

What’s changed? Modern safety systems such as sprinklers, smoke detectors, and fire-resistant stairwells have significantly improved safety in multi-unit buildings. The redundancy of a second staircase adds cost without increasing safety.

That trade-off matters. A second staircase means longer hallways, less usable space, and fewer units—especially in tight or oddly shaped lots. For developers trying to build mid-size, lower-cost housing, the extra stairwell often kills the project.

Critics may argue redundancy is good policy. But the evidence shows single-stair buildings, built to modern standards, are safe. Other states are already adapting. Washington and California have created carve-outs or pilot programs allowing single-stair buildings under certain conditions—typically height limits and requirements to use safety features like sprinklers.

Although Missouri is one of a handful of states without its own statewide codes, if our cities want to expand housing options without major subsidies or rezonings, removing outdated design rules is a practical place to start.

The post Missouri Should Rethink Fire Code Rules that Block Small Apartments appeared first on Show-Me Institute.

The study by the Pew Charitable Trusts and the Center for Building in North America found that small apartment buildings with one stairwell are just as safe as those with two. But Missouri’s biggest cities—Springfield, St. Louis and Kansas City—use building codes that require two stairways in buildings taller than three stories. That rule drives up construction costs and makes many projects financially unworkable.

These two-stair rules are based on the International Building Code, the widely adopted national standard. But they block a housing type common in Europe and now gaining traction in U.S. cities such as New York and Seattle.

The data challenge the logic of the two-stair mandate. In New York, none of the 4,440 single-stair apartment buildings built since 2012—each equipped with fire sprinklers—has been tied to a fire death caused by blocked exits. Seattle shows the same pattern: no increase in fatalities for single-stair buildings.

What’s changed? Modern safety systems such as sprinklers, smoke detectors, and fire-resistant stairwells have significantly improved safety in multi-unit buildings. The redundancy of a second staircase adds cost without increasing safety.

That trade-off matters. A second staircase means longer hallways, less usable space, and fewer units—especially in tight or oddly shaped lots. For developers trying to build mid-size, lower-cost housing, the extra stairwell often kills the project.

Critics may argue redundancy is good policy. But the evidence shows single-stair buildings, built to modern standards, are safe. Other states are already adapting. Washington and California have created carve-outs or pilot programs allowing single-stair buildings under certain conditions—typically height limits and requirements to use safety features like sprinklers.

Although Missouri is one of a handful of states without its own statewide codes, if our cities want to expand housing options without major subsidies or rezonings, removing outdated design rules is a practical place to start.

The post Missouri Should Rethink Fire Code Rules that Block Small Apartments appeared first on Show-Me Institute.

Of course, the answer is obvious if you know anything about how educator pensions work in Missouri.

Missouri’s teacher pension system creates strong incentives for educators to retire as soon as they hit their pension’s peak benefit. This doesn’t mean they’re ready to stop working; it just means that staying on the job in Missouri would financially penalize them compared to retiring and working elsewhere. This system is problematic because it pushes experienced teachers, principals, and superintendents out of Missouri’s schools when they still have a great deal to offer.

When Missouri educators retire early, they take with them years of expertise and leadership. Instead of keeping our best and most experienced educators in Missouri classrooms, our pension system encourages them to leave for neighboring states. This harms our schools and weakens the overall quality of education available to Missouri students.

To fix this, we need pension reform. We should develop a retirement system that rewards long-term service without forcing educators into an artificial retirement timeline. Instead of a system that penalizes continued work, we should create one that allows educators to gradually phase into retirement, perhaps by working part-time or taking on mentorship roles while still accruing meaningful benefits.

Other states, such as Washington, have reformed their pension systems to better retain educators. Missouri should do the same. We cannot afford to keep losing our best teachers and leaders simply because our pension system makes it financially advantageous for them to retire and work elsewhere.

It’s time to change the incentives. Let’s keep our educators in Missouri, where they belong.

The post Missouri Pension System Pushes Out Another Great Educator appeared first on Show-Me Institute.

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Saint Louis County, Saint Louis City, and Brentwood have decided to mandate that new construction and major renovations for several types of properties (residential and/or commercial, depending on the jurisdiction) must be accompanied by EV charging stations. None of these mandates consider the $5,000-per-charger cost businesses will face, and some of these regulations impose a substantial fine for being a day late and an EV charger short.

Some places—like apartments and office buildings where people park for hours at a time—are a good fit for EV chargers. But for other places, a charging station could actually be a liability. Think of places like diners or convenience stores, whose business models rely on getting people in and out quickly. The last thing the owner of a small diner needs is someone who comes in and occupies a table for an hour or longer, nursing a coffee while his car charges. That’s why decisions about where the chargers should be installed are best left to businesses rather than being determined by a one-size-fits-all government mandate.

If local officials want more EV charging stations, perhaps they should first clarify where they can be built rather than dictating where they must be built. Ironically, the municipal codes for the Saint Louis jurisdictions mandating chargers are mum about where chargers can be built outside of the areas where they are mandatory. This lack of clarity results in several weeks of permitting and site plan reviews, which often vary by jurisdiction. This is backwards. Dozens of municipalities nationwide have amended their codes to allow EV chargers to be built wherever property owners see fit and have fast-tracked the permitting process to finish, in some cases within a day. For example, Kane County, Illinois, and Bellevue, Washington, allow EV chargers to be built in all zoning districts. Several states, such as New Jersey, New York, and Oregon, have classified the installation of EV chargers as “minor work,” which helps speed up installation times and cut down on permitting costs. Chicago grants EV charger installation permits within a day and even provides a guide for the installation process. These are all simple ways to speed up the proliferation of EV chargers without twisting anyone’s arm.

Local officials are right to recognize that fueling an EV is different than fueling a traditional car. Due to the time it takes to charge, EV drivers won’t be waiting in lines at centralized “electron stations.” Rather, they’ll incorporate charging into their everyday life. As more Missourians buy EVs, it will make good business sense for more businesses and property owners to install EV charging stations, either to retain current customers or attract new ones. What EV driver wouldn’t the option of charging his or her car while at the grocery store or while typing away at work? Likewise, charging stations at apartment complex could become an appreciated—or even expected—amenity for prospective tenants.

Policymakers could also make it easier for Missourians to buy EVs. Currently some uncertainty exists about the validity in Missouri of the direct sales model that many EV companies use to sell their cars. Several years ago, Tesla was taken to court over the legality of selling its cars to customers without using a franchised dealership. While Tesla eventually won, it’s not clear if other EV companies would be granted the same freedom to sell. With many more EV companies using direct sales entering the market, ensuring they can operate in Missouri can bring EVs to thousands more residents.

EVs come with many benefits. They help improve local air quality and reduce the transportation sector’s overall environmental impact. For Saint Louis EV drivers, charging their EV at home can lead to hundreds of dollars of fuel cost savings each year compared to a gasoline-powered car. EVs have lower lifetime maintenance costs than gasoline-powered cars. EVs can succeed on their own merits; forcing the hand of property owners is the wrong way to speed up the EV adoption process.

The post EV Charging Stations Don’t Need Mandates to Succeed appeared first on Show-Me Institute.

Titled “Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?” it surveys the existing research on the effects of the minimum wage.

What does it find? According to the authors:

Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.

Labor economics isn’t my field of expertise, but from an outsider’s perspective, raising the minimum wage doesn’t look good!

The post New Summary of Minimum Wage Research Shows Negative Effects appeared first on Show-Me Institute.

Unhappy parents everywhere are pulling their children out of public schools. In Nebraska, requests to homeschool are up 21 percent. With textbook Toquevillian can-do attitudes, parents across the country are getting together with friends and neighbors and creating micro-schools. Parent unions are forming and some are calling for a “break up” with traditional education.

What could, or should, Missouri be doing during this upheaval? Number one, we need leadership. The Missouri Department of Elementary and Secondary Education (DESE) has only released reopening health guidelines. Should we expect that all 520 school districts simply figure out a great plan on their own? Meanwhile, Nebraska has created a website (Launch Nebraska) with comprehensive planning guides and toolkits.

Number two, we should be making several easily accessed choices available to parents. At least one district, Maplewood-Richmond Heights, is allowing parents who want a virtual education to enroll their students with one of the state-approved virtual providers under the Missouri Course Access Program (MOCAP). Other districts should follow its lead. This is not a year for inventing things from scratch. Parents should also be able to easily choose in-person enrollment at a private school. There are a number of apps, such as Classroom Wallet, that the state could use to provide parents with funds to purchase tuition. This is not a good year to settle the public versus private debate. This is a year to get kids back to learning.

Third, accountability and transparency must not be allowed to fall to the wayside. For the past six months, public school districts have been held harmless from consequences. If this continues much longer, children will be the ones to suffer and achievement gaps will grow.

Parents were put in the driver’s seat last spring whether they liked it or not. And now they’re supposed to give the wheel back to public school districts that seem to not even know how to start the car. It’s not at all surprising that they’re fed up.

The post Not So Fast, Public School Districts 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.

Far from it. Of the 77 U.S. cities that KPMG ranked (which was not exhaustive of all major metros), Saint Louis ranked 45th and Kansas City ranked 46th. Among the cities cheaper than Saint Louis (and Kansas City) are regional competitors like Nashville, Omaha, Cincinnati, Memphis, Indianapolis, Cleveland, and Oklahoma City, to name a few. Worse yet, Saint Louis was more expensive than all 18 Southeastern cities KPMG looked at, from Atlanta to New Orleans.

So where did the Post-Dispatch get a top ten ranking for Saint Louis? If we only consider regions with populations greater than two million (of which KPMG ranked 31), Saint Louis is the 9th cheapest. I will leave it to the readers of this blog to decide if Saint Louis should pat itself on back for being cheaper than New York, Los Angeles, and Chicago, when it has higher costs for businesses than Nashville, Memphis, and just about every other regional competitor. But if we do decide to use population as criteria, it seems more justified to look at metros with populations similar to those of Saint Louis and Kansas City (between two and three million residents). When we do that, Saint Louis is 7th and Kansas City is 8th out of 14 such cities. That seems awfully middling.

That’s probably why, if one reads the study that the Post-Dispatch reports on, they’ll find that it does not claim that Saint Louis is among the most competitive cities in the country. KPMG didn’t even break down cities by population in the study, choosing instead to do so by region.  The Post-Dispatch story (while citing the study) is actually based on an ancillary KPMG press release, which lauds Cincinnati, and is careful to note context.

Titling an article “St. Louis among most cost-competitive cities for business, report says” when the report in question says no such thing is a questionable decision for a newspaper of record. But this is not just a problem with the headline. The article itself is equally misleading, and it was not a headline writer who placed this story front and center on the Post-Dispatch’s website less than a week before a vote on multiple tax issues (where the city’s business climate is an issue). 

The post Report: Saint Louis, Kansas City *Not* Among Most Cost-Friendly Cities for Business appeared first on Show-Me Institute.

In June of 2014, the Seattle city council passed a new law that will increase the city’s minimum wage to $15 an hour, with the increase being phased in over a period of years. The first increase (to $11/hour) came in April of this year. The American Enterprise Institute (AEI) studied restaurant employment in Seattle for the first 6 months of 2015, and what they found falls in line with what many other studies have shown.

According to AEI, between January and June of 2015 the Seattle Metropolitan Statistical Area (MSA) saw restaurant employment fall by 1,300 jobs—the largest decline since 2009 (during the Great Recession). It’s true that this figure counts job losses in months before the city minimum wage went up. However, the state of Washington’s minimum wage increased starting in January. In fact, after its latest increase, Washington has the highest state minimum wage among all 50 states.

AEI also found that the 1,000 jobs lost during May (which followed the city minimum wage increase in April) was the largest 1-month decline since January 2009.

During this same 6-month period, restaurant employment increased nationally by 130,700, overall employment in the Seattle MSA increased by 1.2 percent, and non-Seattle MSA restaurant employment in Washington increased by 2,800 jobs.

It should be noted that the Seattle MSA includes more than just the city of Seattle. Job losses could be occurring outside the city, and that could be skewing the results. But aside from the minimum wage increase, what economic/policy differences would account for the restaurant job losses in the Seattle MSA and the restaurant job gains that occurred in the rest of Washington?

Is Seattle the canary in the coal mine for the rest of the country? More time is needed to see what the full effects of the minimum wage increase actually will be. However, if these kinds of job losses are occurring in Seattle, which is much better equipped to handle a $15 minimum wage than Saint Louis, what does such a wage floor portend for Saint Louis? Instead of rushing to pass a minimum wage increase that could cost people jobs, Saint Louis policymakers should wait for more results to come in. 

The post A Canary in the Coal Mine? appeared first on Show-Me Institute.

Here in the Show-Me State, we have a similar taxpayer-subsidized labor studies program associated with UMKC, the Institute for Labor Studies. According to the Institute’s mission statement, “the aim of The Institute for Labor Studies is to serve the educational needs of organized labor.” This mission may seem relatively innocuous; however, events put on by the Institute include symposia with slogans like “Revolutionary Organizing” and “Agitate! Educate! Organize!”

Moreover, there’s this story about an activist-led class at UMSL where instructors were recorded advocating violence, physical intimidation, and industrial sabotage as legitimate tactics to be used during labor negotiations. The instructors at the UMSL class are the same folks behind the Institute for Labor Studies at UMKC.

While I do not know whether UMKC’s Institute for Labor Studies engages in overt political activity, the events and speakers listed on their website suggest an ideologically driven mission. Ideology and political activism are fine, but the public should not be forced to pay for it.

The post Washington Legislature Defunds Lobbying Group Paid for With Tax Dollars 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.

Read the full policy brief:

The post Move Missouri’s Medicaid Program Forward, Not Backward 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.

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.

After all, the government is well-equipped to bust some proverbial knee caps of their own, and it looks like the National Labor Relations Board (NLRB) and the Labor Department are taking out the big bats. First, it was Boeing’s decision to move some of its operations from Washington state to South Carolina, which the NLRB is now trying to block. This week, it’s the Labor Department’s turn to do some damage, tightening requirements on employers to report their anti-unionization activities. And today, the National Review editorial board lays out the NLRB’s latest plan to help organized labor and make employer attempts to dissuade employees from unionizing that much more difficult.

It is truly worrisome that the small, ideological leadership of these bureaucracies can so easily, and unilaterally, craft American labor law and interfere with the movement of labor without even a contemporaneous, affirmative act of Congress compelling these fresh rule-making activities. We already know that Obamacare didn’t empower the administration to offer waivers to the law. We know that the Obama administration wants to enact gun control through administrative procedure. Is there anything federal bureaucrats can’t do? If not, isn’t that an enormous problem?

National Review‘s Kevin Williamson puts the problem this way (emphasis added):

If you are an entrepreneur thinking about starting a large industrial enterprise, or an incumbent firm thinking about building a new factory or launching a new line of production, you want to know that your tax and regulatory environment is livable — and that it is not going to change at the whim of one or two or three people in Washington, D.C. The NLRB has five seats (and four members serving; there’s a vacancy at the moment). The fact that such a tiny group of unaccountable political appointees can just wake up one fine morning, have some Pop-Tarts, and then decide to rewrite the nation’s union-election rules is terrifying. Such changes ought to require an act of Congress.

Roll out of bed, toast a pastry, pass a rule. Maybe a bat isn’t necessary after all.

The post Pop-Tartocracy appeared first on Show-Me Institute.

To explain the disparity between advertised and actual savings, the reporter turned to none other than Brian Riedl, lead budget analyst for the Heritage Foundation and upcoming Show-Me Institute speaker. Riedl explained:

“It’s kind of like a parent saying, ‘If you go buy something, I’ll pay the credit card for you.’ And then the kid never goes out and buys it.”

As much as $18 billion of the $38 billion budget cut comes from rescinding previously approved funding allocations for completed projects that came in under budget. In other words, it’s money that was and will never be spent.

For more insight into Washington’s fiscal mess and the games that Congress is playing with the American people, consider attending the seventh installment of the economic policy speaker series cosponsored by the Show-Me Institute, Saint Louis University’s John Cook School of Business, and the Sinquefield Charitable Foundation. On Tuesday, May 3, at 6:30 p.m., Brian Riedl will present a talk, “What Washington Won’t Tell You About the Next Economic Crisis.” The event is free and open to the public, and you can register online.

The post He Gets the Games Washington Plays appeared first on Show-Me Institute.

Americans have spent $17 billion since 2005 to achieve reductions in gasoline consumption that could have been achieved for free.

Today, proponents of ethanol are attempting to piggyback on the recent oil crisis in the Gulf of Mexico in order to gain support for their most recent push to increase the amount of ethanol in the U.S. gasoline supply and keep their subsidies. In a Post-Dispatch article yesterday, Jeffrey Tomich pointed out:

The ethanol industry is also lobbying Congress to extend a tax credit for blending ethanol with gasoline and maintain a tariff on imported ethanol — measures implemented years ago to help a fledgling industry grow. Both the tax credit and tariff are set to expire at the end of the year.

Letting the tax credits and tariffs expire wouldn’t be such a bad thing. Who knows, besides saving the American taxpayers $17 billion dollars, we might actually come up with an alternative energy idea that works.

The post Fueling the Fire appeared first on Show-Me Institute.

It is not exactly groundbreaking research for me to state that teams and players pay substantial income taxes in various forms. Here are the most recent payrolls and league ranking for the five Missouri teams:

1. Rams, $62,384,821 (32)
2. Chiefs, $83,187,156 (31)
3. Cardinals, $93,540,751 (12)
4. Royals, $71,405,210 (21)
5. Blues, $46,485,000 (22)

As far as I know, the location in which a team plays its regular season home games is the primary determinate for which taxes must be paid. So, the city of St. Louis, which hosts the home games of all three St. Louis teams, gets $1,518,079 per year in earnings and payroll taxes just from the Cardinals, Rams, and Blues players. Kansas City gets $772,962 from Chiefs and Royals players. (This post originally mistakenly said that the KC stadiums were outside of Kansas City proper. Thanks to David Nicklaus of the Post-Dispatch for sending me a correction, and for reading our blog!) Of course, when you account for team employees and the profit tax levied on each organization, the earnings tax receipts grow even larger.

Missouri receives an estimated $10,710,088 each year from applying the 6-percent income tax rate to athletes from each of its five sports teams. (With deductions, etc., this figure would be a little lower.) Missouri, like many other states, enforces its income taxes on visiting athletes, too. However, just as players from visiting teams must pay the income and earnings taxes, all the players get credit for taxes paid to other cities and states. The result is that the total taxes paid are just moved around between jurisdictions, as our former editor Tim Lee first pointed out when writing about the “jock tax” in 2005:

But Missouri athletes who pay other states’ jock taxes are able to subtract those tax payments from their Missouri tax bills. When you subtract the revenue lost from other states’ jock taxes, the result is practically a wash. If all 20 states repealed their jock taxes simultaneously, states would get virtually the same revenue with a lot less administrative overhead.

Two lists help us determine whether players pay more or less taxes: states without an income tax, and cities with an earnings tax. The Cardinals players don’t appear to do so well here. They pay both a state income tax and city earnings tax at home, and regularly travel to Pittsburgh, Cincinnati, New York, and Philadelphia. Only when they travel to play the Astros — and, less frequently, the Marlins — do they really get a pay raise. The Royals also pay the local earnings tax when they travel to Detroit, Cleveland, or New York. Both the Cardinals and Royals pay the other city’s e-tax each year when they travel across I-70 for the annual “rivalry” series.

The Blues pay a local tax on their frequent visits to Detroit or Columbus, but get a nice tax vacation when they head to Nashville. Of course, Canadian taxation becomes a issue for any hockey player, and for the Royals to a lesser extent.

The NFL schedule rotates from year to year more than other leagues, but the Rams players have to like getting to play one guaranteed road game in Seattle each year, because Washington has no state income tax and Seattle has no earnings tax. The Chiefs and Rams play this year in the regular season, so both teams will be paying the host city’s e-tax then, as well. (The two football teams usually play in the pre-season for the much-coveted “Governor’s Cup” but I don’t think athlete’s salaries are based on pre-season games so no earnings tax would be collected in that case.) If you are looking to avoid taxes, the AFC south is where you want to play — aside from the smallish earnings tax in Indianapolis, of course. The Chiefs have to pay high California state taxes for at least two games per year. (Disclaimer: All team opponent and schedule info listed here has been pulled from my own memory, with a little help from ESPN.com.) Of course, other factors such as where an athlete keeps his primary residence, the agressiveness of his accountant, etc., will all play a factor here. A player who lives full time in Missouri is going to pay Missouri income tax on salary earned, but not taxed, playing in Texas, while someone who lives in another state might not. I am a policy analyst, not a CPA.

What does all of this prove? Nothing really, yet. This post is less debatable than future posts in the series might be, because in these cases the teams and players are treated just like other businesses, and the taxes paid are substantial. That does not mean I think they should be substantial, just pointing out that the applicable tax policies show no favoritism. Also, it is simultaneously difficult to say that the athletes and teams are not paying enough in taxes when around 100 individual players generate more than $1.5 million per year to the city of St. Louis alone, and it is almost as hard to seriously complain about the taxes paid by modern professional athletes, who earn enormous salaries to play a game for a living. (Am I jealous? Absolutely!)

Future posts in this series will deal with areas in which teams are not treated like other businesses, for better or worse.

The post Taxes and Sports: The Earnings Tax (Part One in a Series) appeared first on Show-Me Institute.