COLUMN: Proposed Missouri tax cuts are a bad idea

Thursday, January 14, 2010 | 4:57 p.m. CST; updated 10:42 a.m. CDT, Wednesday, May 12, 2010

The legislative session has hardly begun, and already the headlines out of Jefferson City are horrifying. “Despite Missouri’s budget woes, ideas for tax cuts flourish” and “Senate hearing explores eliminating income tax.”

Well, it’s good to be reminded, I suppose, that the Republicans are still in charge. But we rational people have to restrain ourselves from screaming, “No! Don’t do that!” Missouri already has one of the lowest tax burdens – especially on the rich and powerful – of any state. Our level of services – especially for the poor and weak – is also low and headed down.

Just consider some of the proposed tax cuts, most of them reported by The Associated Press: waiving sales tax on guns and bullets, doing the same for yoga studios, tax breaks for people who build storm shelters, reversing the long-overdue reassessment of the most valuable farmland. Bad ideas, one and all.

Even worse is the notion, promoted by the same right-wing think tank that seeks to divert money from public schools and inexplicably supported by the otherwise sane Rep. Chris Kelly, of replacing our minuscule and modestly progressive income tax with an all-inclusive sales tax.

Missourian correspondent Jeremy Essig reported Wednesday that expert testimony at a Republican-organized “seminar” revealed that the promoters are both exaggerating the benefits and understating the tax rate needed even to generate the current level of revenue.

Surely cooler heads and fiscal realities will prevent such giant strides in the wrong direction. So you’re probably asking what our rulers down river should be doing instead. Allow me to suggest a few actions that would contribute to the public weal without picking the public pocket.

One of Chris Kelly’s best ideas is a bond issue to fund major capital improvements around the state. Chris and Republican Rep. Steve Tilley proposed a bond issue of $700 million, most for higher education building projects. As Chris explained it, these bonds would replace a similar bond issue dating from the reign of Gov. Kit Bond and therefore add little to ongoing budget demands.

In addition to playing catch-up on building needs, the projects would provide thousands of good construction jobs. That looks like a win-win deal for all of us. Of course, now that Gov. Jay Nixon has endorsed the idea, key Republicans are having second thoughts.

Another good idea left over from 2009 is Rep. Mary Still’s campaign to curb abuses in the payday loan business. As she has pointed out, Missouri has looser rules and more predatory lenders than any of our neighbor states. So she wants to limit interest charges to 45 percent and tighten lending rules to protect the poor people who are the lenders’ prey. Looking after the most vulnerable is, or ought to be, high on the legislative priority list.

Mary also wants to remove elected officials from the board of the Missouri Housing Development Commission, which hands out lucrative tax credits to developers of housing intended for the poor and the elderly. Terry Ganey of the Columbia Daily Tribune has reported extensively on the peculiar proceedings of that body.

Also urgently needed, as I noted last week, is campaign finance reform and tighter ethics rules for legislators themselves. Republicans and Democrats agree on the need, though not on whether limits on giving should be reinstated.

Finally, in our university-dependent village, we can all agree that it’s important for legislators to get over their pique at the way the deal was made and find the dollars to honor the Nixon-Forsee pact of only a 5 percent budget cut and no tuition increase.

Our legislators could do worse than to enact these proposals. History suggests that they probably will.

George Kennedy is a former managing editor at the Missourian and professor emeritus at the Missouri School of Journalism. 

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