By Michael Rathbone
Special to The Globe
ST. LOUIS —
In “Reform Missouri’s taxes,” Missouri Rep. Bill Lant argues for income tax reform in Missouri. I agree that it is necessary for the state to drastically overhaul its income tax code.
In addition to what is happening in Kansas and Oklahoma, Nebraska is also looking to eliminate its income tax. If both Nebraska and Oklahoma are successful in following Kansas’s lead, all of the states on our western border will have a significant competitive advantage over us.
While some have criticized the Kansas plan for severely cutting revenues, Missouri has the opportunity to mitigate those costs with changes to its economic development tax credit system. For instance, the state issues more money in tax credits than it collects in the corporate income tax. Pairing the elimination of the corporate income tax with a tax credit issuance cap could prevent revenue losses. Expanding the sales tax base could also allow for other income tax cuts.
Income taxes, especially corporate income taxes, are among the most harmful taxes for economic growth. Reducing or eliminating them would enable Missouri to better compete with its neighbors. Hopefully, the actions of our neighboring states can serve as a wake-up call for Missouri to undertake serious reform.
Michael Rathbone, policy researcher