I previously blogged about the Missouri Senate’s stated agenda for the upcoming legislative session that starts in January. Over in the House, Speaker Tim Jones (R-Saint Louis County) plans to focus on business interests. Speaker Jones has stated, “Whether that means cutting taxes or implementing incentives, we’re going to have everything on the table and we’re going to do what’s best for Missouri businesses, while we protect our Missouri taxpayers.” While that sounds encouraging, I do have a few words of caution.
First, being pro-business is not the same as being pro-free market. Being pro-business can devolve into being pro-some businesses and anti-other businesses. For example, my colleague Kacie Galbraith wrote about the Columbia Regional Airport and the various incentive schemes city officials are cooking up to entice American Airlines to offer service there, at the expense of Delta. The proper response would have been lowering costs and burdens for ALL airlines and letting the free market determine which, if any airlines, might serve the Columbia region.
The Speaker has assured the taxpayers that there will not be anything like “Aerotropolis” coming down the pipe. That is great to hear. Yet, when Speaker Jones talks about “implementing incentives,” I get nervous. The biggest incentive for businesses to locate in Missouri would be a favorable environment for ALL businesses. The incentives that legislators talk about usually mean a new tax subsidy, taking money from one group of people and giving it to another.
I hope the House moves in the tax cut direction and away from the business incentive direction. I have blogged (a lot) about the benefits of eliminating the corporate income tax and the taxes on pass-through entities. As I mentioned before, the Senate seems disposed to pass some sort of income tax cut. If the House follows suit, it is possible to enact some meaningful reform.