Green Room

Another Company Leaves Missouri For Kansas; It’s Time To Stop The Madness

posted at 12:18 am on April 11, 2012 by

The Kansas-Missouri border war has led to yet another tax incentive-fueled move. The big winner this time? Teva Neuroscience, which will move from Kansas City, Mo.,  to Overland Park, Kan., next year.

We have reached absurd levels of tax incentive parrying on the western side of the state. Teva’s current location is an 8-minute drive down the highway from its new location at the corner of College and Nall. As the crow flies, that is a move of fewer than 4 miles.


View Larger Map

It is clear that Missouri’s economic development status quo has been neither effective nor efficient, so I would propose a new plan: Do not participate in the taxpayer-funded tax incentive bidding wars that have companies being traded like baseball cards and have seen the state hemorrhaging tax dollars over the last decade. Simply state the reason why companies should stay in, and come to, Missouri clearly for all companies who want to find a predictable, business-friendly, and stable economic environment to set up and maintain shop.

How about ending the corporate income tax? I have noted in the past that swapping development tax credits for a wholesale elimination of the corporate income tax would be a far better approach to developing the state’s economyAs my colleague Michael Rathbone has noted, only three states in America do not have a corporate income tax or a gross receipts tax. Corporate income taxes are among the worst taxes you can institute if you are looking to pursue policies that promote economic growth. The transition could be accomplished in no small part by scrapping a development plan that has failed for more than 10 years.

Stop picking winners and losers. Missouri and Kansas officials are playing a game of economic futility when they chase companies and escalate the “targeted” tax incentive bidding wars. Both states need to wise up, but especially if Kansas continues on its path, Missouri needs to change the game — and not play on the old terms anymore.

Recently in the Green Room:

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Way to get an upgrade from Show-Me Institute to Green Room, Pat!

alwaysfiredup on April 11, 2012 at 1:37 AM

Another item is the same capital assets tax that got Sen. Mckaskal

jhnone on April 11, 2012 at 2:15 AM

But this would ruin Obama’s “corporations are evil” meme. It would be terrible if large corporations employed millions of people and provided them with benefits. Oh, wait…

College Prof on April 11, 2012 at 8:30 AM

The more busineses leave, the less the Show Me State will have to finish the cleanup in Joplin. Previous poor decisions do come back to haunt.

Sabercat2 on April 11, 2012 at 9:57 AM

I went to a transportation engineering conference in St. Louis and it was dead. I caught some seminars:

“Well gee, our city’s population has been cut in half, so we’re going to revitalize our economy by converting road lanes to bike lanes and big sidewalks! Sustainable! Walkable communities!”

You can’t fix stupid.

Transpo on April 11, 2012 at 10:55 AM

The more busineses leave, the less the Show Me State will have to finish the cleanup in Joplin. Previous poor decisions do come back to haunt.

Sabercat2 on April 11, 2012 at 9:57 AM

…you do know that KC and Joplin are completely unconnected, yes?

alwaysfiredup on April 11, 2012 at 12:04 PM

States squabbling over corporations might be a moot question for a company like this that might pack up and move to another country if they are treated like a cash cow. Companies are created for the benefit of the owners, not the state.

dunce on April 11, 2012 at 4:47 PM

If Kansas City, Mo wanted to stop the business flight, they might consider eliminating the Kansas City earnings tax, they might consider getting accredited schools, how about lowering the murder rate.
Companies are just tired of dealing with a corrupt city government in KC. Emanuel Cleaver, who served as Kansas City City Councilman from 1979 to 1991 and as mayor of Kansas City for two terms from 1991 until 1999 and now a US Representative is being sued for nonpayment of a 1.25 million dollar loan, guess who is going to pick up the bill for that one, yes the taxpayers. Missouri has really no industry and with St Louis and Kansas City they have two of the highest crime and welfare cities in the country.
Now compare KC to Overland Park, Ks. There is no comparison.

MJZZZ on April 12, 2012 at 2:43 PM