Everyone’s aware of the hullabaloo surrounding President Obama’s “jobs” speech next week. The last time he gave a speech and had a plan, it cost nearly a trillion dollars and unemployment went way up. The country can’t take many more of these kinds of plans!
We don’t have to go to D.C. to find “good” government ideas about job creation. All of us have a ring-side seat to just such a display, beginning this Tuesday at high noon. That’s when the Missouri General Assembly will convene in a special session called by Governor Nixon for the purpose of passing his “Made in Missouri” jobs package.
There is, of course, some dispute among legislators and the governor about whose idea the jobs package really is. Everyone wants to take credit – but it could very well be one of those “be careful what you ask for you” moments.
Both the president’s jobs plan and the “Made in Missouri” jobs package are based upon a very basic, demonstrably false notion that government actually creates private-sector employment.
Government tax credits, subsidies, etc. do little – actually, pretty much nothing – to offset the burden of government laws and resulting regulations. Government entities are always looking to offset those impacts. Of course, those same entities will not admit that those laws and over-regulation are the reason they need to provide “incentives” in the first place.
The president’s jobs plan will undoubtedly renew his call for “fair share.” You can count on the fact that he will continue to think that those who are already paying the most must pay more, and that those who pay nothing (up to 51% of the American households) should still pay nothing to support their “federal family.” These notions will undoubtedly be a plank in his no-jobs plan.
Since the president’s track record on “job creation” is not even good enough to be called dismal, for the country’s economic well-being, Congress should politely say, “Nice speech” – then go forth and do what’s needed to really get jobs going: cut government spending, reign in government regulations, and let the private sector work without government screwing it up!
But even here in Missouri, we see the continued trend to provide incentives rather than eliminate government restrictions on the private sector. If tax credits worked, the 60-plus credits that exist today should place Missouri as one of the top economic forces in the country! However, it’s the exact opposite. Missouri consistently ranks about 48th in gross state product. More of the same (albeit repackaged ideas) will not improve our state standing or our economy. Instead, we should be implementing tax reform that includes eliminating the individual income tax!
And, just as the president’s plan includes his idea of “fair share,” so does the “Made in Missouri” package. In order to be able to “afford” new tax credits, some tax credits are being capped and sunsets applied, which is a very good start. At least one is being eliminated.
The tax credit commonly known as the Senior Circuit Breaker was first passed in 1973. It was to provide seniors some tax relief for increasing property tax burdens even back in those days. The amount to qualify and receive has been increased, but neither has been sufficiently adjusted to match inflation.
The “Made in Missouri” package includes the proposal to take away this tax credit from seniors who are renters. Now, this makes perfect sense from a government perspective. After all, government refuses to acknowledge that taxes are passed along to the end consumers and not paid by companies or, in this case, by landlords. The thinking is that renters obviously are not paying property taxes since they rent. It’s a false premise and a blind excuse for providing revenue to others by taking it from seniors.
The Senior Circuit Breaker tax credit should be reveiwed comprehensively – as should all tax credits. However, most of the other tax credits have lobbyist attached to them and are too hard to change. Instead the proposal supported by the Governor and legislative leaders is to go after the tax credit without lobbyists.
This approach is as shameful as the president not acknowledging or demanding that a fair-share tax model would require more people to pay some amount of federal income tax and not just make those who already pay the most pay more!
It’s my experience that most Missourians still believe that projects like the China Hub will happen if it is economically feasible and government gets out of the way. They don’t believe that giving away their tax money via subsidies (a.k.a. tax credits) is the answer.
We will see if the legislature and governor agree. I’m not holding my breath!