Tuesday, March 2, 2010
There is an effort to repeal the city of St. Louis’ 1 percent earnings tax. The talk about ending it is far ahead of the ideas to replace it.
That figures.
In Jefferson City, legislators are pondering whether to end the state income tax and then replace it with an increase in sales tax.
The state is facing a massive deficit, yet the talk is centered on cutting the state’s largest revenue stream and increasing a tax on those of us that keep the economy moving by actually buying stuff.
Makes sense, right?
With all the chatter about cutting taxes, it would be easy to think that Missourians are overly taxed.
The fact is that Missouri is a national freeloader. For every dollar we kick to the federal government we get back $1.32 in government spending. That’s a 32 percent profit.
I guess you could say the Show Me State is on welfare.
Just kidding – kind of.
According to The Tax Foundation Special Report No. 158 entitled “Federal Tax Burdens and Spending by State” and the U.S. Census Bureau Consolidated Federal Funds Report of 2005, Missouri is reaping more than it sows.
According to the latest report (1981-2005), Missouri totaled $35,171,000 in taxes paid to the federal government. In that same year, Missouri’s federal spending received total reached $48,273,000.
It gets worse when you break these dollar totals down per capita.
Per person, each of us paid an average of $6,078 to Washington, D.C., and we got back $8,342. That puts us 17th in the nation, comfortably in the top half of states.
The fact we get a $1.32 back for every $1 we send to the government also ranks us 17th.
There are mitigating factors such as the national debt, but the Tax Foundation takes that into account and factors it into the total numbers.
The numbers don’t lie. We’re a drag on the economy. We’re taking more than we are giving.
I’m being facetious to make a point, but it is fun being a devil’s advocate.
Speaking of the devil, he’s in the details; let’s examine some other numbers.
Per capita, Missourians paid $2,261 in taxes to the state, according to another Tax Foundation report. That is 32nd in the nation. Once again, this state is at the lower end. The state’s tax rate is 9.2 percent of income, while the national average is 9.7 percent.
So, we’re taking in more than we’re giving out from the federal government and our tax rate is not very high compared to most states.
That means there is plenty of money for things like education, right?
According to an American Legislative Exchange Council study (2006-07) Missouri is 28th overall in spending and 33rd in expenditures per student. Our spending per student is $8,268 and the national average is $9,389.
That same study concludes that the state’s average salary of instructional staff is $39,922 compared to a national average of $46,593. This puts us in the embarrassing slot of 45th in the nation.
Based on what is going out and what is coming in, Missouri should be ashamed of itself.
I don’t want the state to be first in taxes. But the idea of ranking 45th in any positive statistic in America is not acceptable. It seems like there is immediate reaction to rankings on crime, how the water tastes and how fat Missourians have grown.
But the fact that the state actually has a low tax rate and then spends little on education goes unchallenged.
What would this state – or any state – be like if it never raised taxes?
What would this state be like if the federal government decided we could only get back as much as we put in?
These questions should be answered before the unilateral cries of “cut taxes” ring out.
The residents of this state also have to come to grips with the need to improve. Being in the bottom half of anything is enough to spur change. There used to be a time when Americans and Missourians wanted to be the best. We wanted to always be first. We always wanted to win.
Those notions seem to have been replaced by a feeling of content by simply not being last. “I want my state to be great just as long as I don’t have to help pay for it,” seems to be the new Show Me State motto.
We think most of the nation is laughing with us, but it isn’t true. It is laughing at us. And it doesn’t matter what color the state might be. Both blue and red states snicker when they look at our numbers and hear our rhetoric.
It’s time for this state to step up. That will begin when we stop accepting mediocrity and stop being a burden on the nation financially.
Comments
flyoverland (anonymous) says...
The "unfair tax" will reduce the buying power of retirees by double taxing their savings, funds they were already taxed on and in exchange eliminate the income tax which will not benefit them because they no longer work. This "unfair tax" will never pass.
March 2, 2010 at 7:29 a.m. ( permalink | suggest removal )
Rune04 (anonymous) says...
Your explanation of how much tax money we send to Washington and how much we get back is very enlightening. Does ponzi scheme ring a bell?
March 2, 2010 at 9:14 a.m. ( permalink | suggest removal )
bs (anonymous) says...
This article points out how archaic the Missouri tax structure is. The correlation to education shows what Missourians value. We are heading down the wrong path and repealing the 1% city tax will not put us on a new one.
March 2, 2010 at 9:24 a.m. ( permalink | suggest removal )
Rune04 (anonymous) says...
Studies after studies show that increased funding of education does not correlate to a better education. If I am not mistaken, the per pupil monies spent on the City of St. Louis School District is on the high side compared to the rest of the state.
March 2, 2010 at 10:04 a.m. ( permalink | suggest removal )
ExistentialHumanist (anonymous) says...
@ Rune04: in respect to state investment in education, you're dead-on. The most influential investors, education-wise, are...drum roll, please...PARENTS.
March 2, 2010 at 11:12 a.m. ( permalink | suggest removal )
Billsey (anonymous) says...
Alvin,
I don't know if the others have caught this or not, but if the powers that be really want Missouri to contribute more in taxes, they can get that balling rolling rather easily by making sure that Missourians are paid the same as everybody else. Missouri contributes less taxes to the fed because Missourians are paid less money. Since it is not allowable to have higher federal taxes by percentage in one state than in another (all are taxed the same), lower salaries mean lower taxes going to the fed. If they want more taxes out of us, they should be putting more pay into us.
March 2, 2010 at 12:32 p.m. ( permalink | suggest removal )