Masking the failed attempt at Bombardier with good intentions

It is OK for our Missouri legislature to go down new paths to fix the sinkhole of economic floundering and suburban sprawl, but the attempt at luring Bombardier to Kansas City can be a lesson well-learned.

The idea of giving tax credits to wealthy business men so that they can start a colossal factory, leading to thousands of jobs doesn’t sound so bad in theory. However, history has shown that although tax credits do and will help solve some state issues, in the long run, the health of Missouri and especially large cities like St. Louis and Kansas City will depend on the lowering of income and earnings taxes that are cutting through small businesses and driving city dwellers elsewhere. Lowering taxes, thus giving businesses the chance to start and compete in the big cities will create more of a balanced job source, and boost the economy.

A need for tax relief

Missourians have been hurt by crime, hurt by failing schools, and hurt by gas prices…relief needs to come from somewhere.
Studies have shown that Missouri is one of the top states that is affected the most by gas price trends, meaning that when gas prices rise, Missourians are more affected fiscally by the percentage of gas taxes taken away, then other states are.

Then, if one is a resident of St. Louis, the earnings tax and income tax are added on to the plate. No wonder people in Missouri are driving less and not sending their children to better, more expensive schools; they don’t have any money.

Local politicians are painting the economy as one of the main issues in the upcoming year. What better way to help the economy fix itself than by taking away those earning and income taxes, and getting revenue elsewhere?

Contribution Critics

Just as a baseball player may blame a loss on a call from the umpire, politicians often fault government officials for their failure to succeed. Sports critics will explain how there are a number of reasons that can lead to a loss, and that trying to the shift the weight of the problem behind an umpire is only shielding players from recognizing their own weaknesses they must develop to win. Politicians finding themselves behind in fundraising, losing races, and unhappy with their success are now turning to contribution limits as a crutch rather than making an effort to their own money. Every candidate starts out with the same score in their account, but those who raise more money are simply working harder and developing the relationships they will need to be an effective legislator for their district. Rex Sinquefield is constantly being criticized for his efforts and contributions in the political arena. Looking at the facts, it would be hard to find anyone as generous and giving as he has been in terms of sharing his money for a good cause. How can critics spend their time knocking Rex Sinquefield when he has used his money to help special needs children, poor and disadvantaged urban children, and doing whatever is in his power to develop the St. Louis community? It would be one thing if Rex was spending his days with financial advisers and do whatever he could to make himself even wealthier, but he is reaching out and trying to make positive change with the resources he has been fortunate enough to acquire. Because Rex Sinquefield has passion in these areas, he has found legislators who share his interest and donate towards their campaign in an effort to help people, not hurt opposing politicians. Every campaign focuses their fundraising around finding donors who will support their interests, but those who cannot find people to support their views and back up their campaign need to focus on their personal appeal to their constituents rather than trying to blame the laws for their opponent’s success. Our world needs more citizens like Rex Sinquefield who want to put back into their community rather than be money hungry towards their personal interests, and those who are criticizing his donations are ultimately criticizing the effort to help disadvantaged children. Baseball players striking out are encouraged hit the batting cage and start swinging at pitches rather than getting upset at an umpire calling a third strike; critics on contribution limits need to stop searching the web for loopholes and pointing fingers and get out in their community to find their own support.

Columbia Daily Trib Campaign Finance op-ed misses the mark

After reading through the article “Wealthy get their money’s worth from Missouri politicians” in the Columbia Post, it is striking to once again notice that critics of Rex Sinquefield’s spending methods fail to report the good reasons behind this spending, skipping instead to point out that Missouri should not be given over to only the opinions of the wealthy. This article in particular has a very negative connotation when reviewing Sinquefield’s ‘sincere’ motivations for donating money to politicians—alluding to that idea that his personal opinions are shaping laws at the drop of a hat. For one thing, politicians must be given some credit here, as each individual has his/her own ideals as well, and one would hope that we would elect people that would not be swayed by the views of constituents throwing money in their face, and not go against their personal views. Also, the article fails to review some of the areas that Sinquefield promotes through contributions, and to point out the outstanding results, especially in our failing education system, that can come about. By attaching negative words, the readers are led to believe that Sinquefield is not only shaping the state government singlehandedly, but also shaping it in a scandalous way. Shouldn’t well-informed, educated people who have lived in Missouri and who have seen the effects of its internal problems be the very people helping to make decisions? Sinquefield is not throwing money out at random, trying to get politicians to pass legislation making him benefit—one of his major goals is to reshape the struggling school system, that needs a budge in the right direction(like implementing school choice), and this is a selfless goal. The idea of fixing the school system, which will in turn fix other areas—crime and poverty—is not a new concept, as cities like Milwaukee have implanted things like school choice. If indeed, there is a direct correlation between the wealth’s donations and passing of legislation, then we must examine what exactly the interests of those donors are. And, it is usually not too difficult what these interests are. For Sinquefield, much of the interest he takes is in helping the poor and helpless in St. Louis get that funding or opportunity they need to succeed in life. If people are going to criticize the way in which donors “affect” passing legislation, they need to also to into account where exactly this money is going.

Penny-pinching politics

Missouri election season is really starting to kick into high gear, and one of the main issues is the economy—especially in the big cities. More and more people are starting to move out of the cities and into the surrounding suburbs, and the economies in the cities are starting to suffer. There are many factors to blame (education being a large one), and one of the largest is the city earnings tax in St. Louis and Kansas City. On the surface, the earnings tax seems like no big deal, right?

Not so much. An article written by the Show-Me Institute showcases this example: “Consider a Missouri household with an adjusted gross income of $35,000, which is near the 2007 state median. The members of such a household would pay an additional $350 in income taxes each year simply by living or working in Saint Louis or Kansas City.” Okay, $350 that I’d much rather use elsewhere, but it’s not THAT much. It gets better: “If members of this household chose to save the extra $350 they would keep each year in lower taxes, rather than spending it on increased annual consumption, their total household wealth during the following 40 years would be more than $80,000 higher than if they had paid the earnings tax each year. In other words, simply by choosing to live and work a couple miles down the road, the household’s earners would garner more than an additional $80,000 during the course of their careers.”

Now THAT is an eye-opener. $80,000 is a lot of money, even if it’s spread out through 40 years. Imagine if you set aside what you would normally pay in city earnings tax and saved it for your retirement. That extra 80 grand would really make the difference when you’re living on a fixed income.

So even though the 1% tax doesn’t seem like much, you shouldn’t blow it off as an unimportant matter during this election season.

Click here to read the rest of the Show-Me Institute’s article.

Unlike any other...Bombardier a Red Herring?

Missourinet has an interesting ex post facto plug for why we should all love Bombardier.

Creators of the tax credit program pronounce it unlike any other economic development tool in the nation or maybe in the world [was that a pun? the French language is hard for some people!]. It provides millions but it also says no tax credits will be given until people are on the job..and the company has to pay back all of that money over time, with a five percent interest.

Does it say if Kansas City or Bombardier is responsible for actually building the thing? Does it say what to do if, like their Canadian loans, they DON'T pay them all back?

Although legislators think Missouri's chances are 50-50 at worst...and maybe as good as 75-25 that Bombardier will build its factory here, they think the state will still win if the company decides to stay in Montreal. They say this kind of tax credit structure can be used for the next mega-industrial development project anywhere in Missouri and if local communities want to base their own business development tax-incentive packages on the state structure, they are welcome to.

So let me get this straight. Legislators DON'T want Bombardier to come here? But they put together a package under the guise of luring them here, all the while in "talks" with the company. Raise your hand if you feel played. Now, if what they wanted to do was make a sexy tax credit package, why didn't they just do that, and why aren't WE the ones taking the highest bidder?

Last concern: what happens if an excessive number of new Missouri businesses avail themselves of this tax credit? I don't see it as a likelihood, but if the cap on tax credits offered is only per business, then the real amount of tax credits could be anything. If I understand that correctly, we've just opened the doors to a flood of uncontrollable spending, with an uncontrollable affect on the budget, and turned the State into a corporate welfare office.

I guess we'll have to make new license plates for sure now.

Bombardier's Deal Stinks

Well, people are at it again with this whole Bombardier deal. I was hoping it would simply be destroyed in the Senate, but my hopes were destroyed instead.

Written by Jason Noble

Earlier versions of the bill had included stringent conflict-of-interest guidelines that would prevent current lawmakers, Department of Economic Development officials and their families from working not only for a company receiving the $240 million tax-credit package, but also any firms contracting with that company.

Among those affected were Amy Blunt, sister to Gov. Matt Blunt, and Sen. Jack Goodman, a Mt. Vernon Republican.

The version of the bill approved Thursday includes a conflict-of-interest clause, but limits it to elected officials and some Department of Economic Development officials going to work directly for Bombardier or one of its subsidiaries, meaning Lathrop & Gage is once again a safe haven for lawmakers and their kin.

This bill, which would allow millions of our dollars to be basically given to a Canadian company, is rotten as it is. Now, there seem to be breaks for 'special people'. Additionally, there has never been a lot of transparency with it either. Greg Steinoff recently told people he was sorry, but he could not release all the details. So, we don't know everything there is to know and the Governor's sister will not be affected...all on top of the millions we would lose. Can Missouri afford this...can you afford this?

All I can say about this is Stinky Stinky!