Cutting Missouri’s income tax is ‘Voodoo Economics’
ST. LOUIS, MO (KPLR) – The first President Bush once referred to trickle down economics as, voodoo economics. 25 years later and the whole idea that making the fat cats richer will trickle down to the rest of us still makes as much sense as punishing your enemies by putting pins into a voodoo doll. Right now, some of the biggest voodoo witch doctors have offices in the Missouri state capitol.
These are the lawmakers and lobbyists who are claiming, with a straight face, that slashing income taxes for businesses would make Missouri more prosperous. This is a lie on many different levels. For one, anyone who thinks that businesses would use any extra money to create new jobs hasn’t lived through the great recession. Businesses would use the extra money to fatten profits and retire debt, not create jobs.
There’s also no evidence that cutting taxes leads to new businesses being set up. State taxes make up such a small part of the profit and loss picture that they hardly matter. What matters first is access to customers. After that, businesses want an educated workforce. After that, they want decent infrastructure. Lower state income taxes are not on that list.
But the income tax cut proponents keep claiming that since neighboring Kansas slashed income taxes that we have to as well. A survey of the Kansas Business Registry shows no net new jobs have been created. New businesses have opened, and others have closed; Net sum zero. The income tax cut also is costing Kansas. A $50 million dollar tax collection shortfall in June alone. So, the evidence shows cutting state income taxes doesn’t create new jobs, it just makes fat cats fatter. But it doesn’t natter if you believe in voodoo.
I’m Charles Jacoand that’s Jacology.