The Post-Dispatch’s $4 Billion Tax Hike
posted at 10:36 am on April 4, 2012 by Patrick Ishmael
Missouri’s major dailies have had quite a run over the past few days. Last week, the Kansas City Star told readers that the state’s governor needed “to promote reasonable revenue-enhancing measures” — taxes — and put more money toward state programs. The notion of “government investment” features prominently in the piece, as increasingly has become the case when “revenue-enhancing measures” are suggested, post-Stimulus. What the editorial board doesn’t say is that the city’s own local taxes are already among the highest in the region.
Stratospheric municipal taxes overlayed with an even higher state tax burden? This won’t turn out well.
But yesterday the St. Louis Post-Dispatch, The Star‘s cross-state peer, spectacularly one-upped the KC paper. Missouri lawmakers are constrained by law in how much they can tax and spend each year and are billions below the statutory limit. How much of that difference would the Post-Dispatch like to spend?
A lot of folks purchased Mega Millions lottery tickets last week dreaming about what they could do with $640 million. Imagine what $4 billion would do for Missouri.
Let’s be clear: That’s a radical tax hike proposal, tucked into what is otherwise an uninspired editorial about state and local governing responsibilities. Combined state and local tax rates have stayed roughly the same for decades in Missouri, but the Post-Dispatch would have those rates hurdle skyward to provide more public services and somehow, some way, improve the economy above the status quo.
Even the suggestion that raising taxes and spending would help the state makes no sense by the newspaper’s own standards. State and local tax rates have actually increased slightly since 1980, the apparent “good ol’ days” implied by the editorial, from 8.6% then to 9% today. The newspaper can’t even claim that plummeting tax burdens are why Missouri is suffering economically, since by its own metric, taxes have actually increased over the last 30 years.
The proposal is mostly academic here in Missouri, as taxpayers and policy makers in the state would blanche at the thought of such a hike, but that doesn’t mean the suggestion isn’t troubling. If implemented, the plan would have awful real-world implications — giving families less to spend and taking capital out of the market for use in less productive government programs. It’s a roadmap to ruin, and yet the Post-Dispatch apparently doesn’t see it.
“Imagine what $4 billion would do for Missouri”? No, imagine if legislators took their cues from Missouri’s newspapers. What a nightmare that would be.