News Release

The Missouri Organization of Corporate Knicknacks (MOCK) has announced its agenda for the Missouri General Assembly in 2013.

“We believe we should be granted cuts in our income taxes,” said Nicholas Nax, President and CEO.  “By letting us keep more of our taxes we would be able to create jobs someday that might generate more income taxes at some undefined period that could offset the taxes the state does not collect from us now. The legislation also would let our members in Caruthersville, Rolla, Linn, Palmyra, and Kahoka compete more directly with Kansas, which recently cut its income tax for businesses enough  to create a $295 million shortfall for the Kansas legislature to deal with this year.”

Nax, a graduate of Kansas State University, believes it is important for Missouri to allow Kansas to determine Missouri’s economic policy.  Before becoming President and CEO of MOCK, Nax was the owner of Amalgamated Buggy Whip Corporation. He closed the business because of excessive taxation and assumed leadership of MOCK because, “its philosophy speaks for small business people like me who only want to make good, affordable, products for Missourians.”

“As good business people, we believe in creating jobs with the money we are allowed to keep regardless of whether there is a demand for the products those extra people would create, ” he said.

Nax said MOCK’s members are firmly in bed with those who argue that “supply side” economics are the keys to economic success.  “We believe that if our taxes are so low that we can hire more people to produce things, Missourians will benefit from having more of those things to buy and they’ll be willing to buy them because the prices will be lower because our taxes are low,” he said.

MOCK argues that demand for those products is irrelevant as long as the company is allowed to pay the smallest amount of taxes possible.  “Supply and demand is an outmoded economic theory that says business will flourish if it makes things people want to buy,” Nax observed in his address to MOCK stockholders during their annual five-day four-night meeting in the Caribbean aboard the Capitalist Cruise Lines flagship, Mucho Dinero.  “We will remind our lawmakers that we are one of the reasons they are in the positions they now hold and impress upon them the importance of taking actions that will benefit us today and might benefit the people of Missouri someday,” he concluded.
“After all, we know better how to spend our tax money than they do, and we want more of our tax money.”

Missouri’s “growing” economy

One would think that Missouri is rebounding from the recession with great vigor, judging from all of the governor’s jaunts to this corner of the state and to that corner of the state and seemingly all the points in between in which he announces new jobs are being created right and left.   

One would think that Missouri is a magnet for new and expanding business after a decade of pro-business laws passed by the Missouri legislature.  Each of the proposals is touted as encouraging job creation and making Missouri more business friendly.

We’ve seen and heard all of this and we’ve passed it along to our listeners and readers as all dutiful reporters to. 

But now comes the United States Department of Commerce to tell us Missouri’s economy ranked 43rd in the nation in growth last year.  The Commerce Department calculates our economy grew by four one-hundredths of one percent in 2011 after growing by 2.1% in 2010. The National Average for 2011 was 1.5%.  So we’re dutifully passing that information along to you, too.  

Obviously the Commerce Department has not been attending the governor’s big announcements.  Obviously the Commerce Department has not been paying attention to all of the great job-creation and retention legislation the legislature has approved in the last decade that surely have made Missouri the economic development Garden of Eden that supporters of the legislation have said it would become.  

The department, in fact, says almost every part of Missouri’s economy grew by less than the national average last year—-or shrank. 

Of course, the state economic development department is poo-pooing the department study.  State agencies almost always are dismissive of studies that show Missouri isn’t keeping up with the rest of the country.  After all, what administration, regardless of the party controlling it, wants to accept reports from outsiders that we are not as good as we say we are?  Their research is always faulty.  The categories on which they base their studies are wrong.  They used outdated figures.  Things have changed since the period on which the study was based.   Studies that show Missouri is less than its leaders want its citizens to believe it is are clearly wrong, wrong, wrong.  

But rest assured there are always silver bullets in the political gun. One silver bullet for the last couple of years has been Right to Work.  Another magic bullet from last year was the proposed Aerotropolis  for St. Lous that would trigger massive economic growth in eastern Missouri.  Tort reform was a magic bullet in its day.  And we could go on and on. 

It must be acknowledged that some things are pretty obvious.  The unemployment rate in Missouri is down.  The state releases those numbers every month although it is reluctant to calculate how many unemployed people are not in the calculation because they’ve exhausted their benefits and still don’t have jobs or who have just given up.  It is true that GM is expanding big-time in Wentzville and Ford is sinking a ton of money in its production facilities at Claycomo.  It’s been months since the state has taken over a troubled bank.  So there is good news although the commerce department report indicates that bright spot is just some reflection off a needle in the economic development haystack.

One of these years the experts will pronounce the recession is fully over and our economy has fully recovered.  That’s when we’ll see if all of the legislature’s work pays off for anybody but bosses and stockholders and whether Missouri uses all these tools to create a Show-Me State Boom.   

Watch for this commerce department report to fuel campaign ads this summer.  This situation has to be somebody’s fault!  

Year after year, the Missourinet has reported that Missouri is 40-something is various categories including education funding, prison funding, social services funding, cigarette taxes—it’s a long list.

The great vaudeville comedian Myron Cohen often told the story on the Ed Sullivan Show–years after vaudeville died–of the husband who opened a closet door in his bedroom and found a naked man inside.  “What are you doing in there?” shouted the enraged husband.   “Well,” said the naked man, searching for an answer, “Everybody’s got to be someplace.”  

Our “someplace,” despite all of the pro-business legislation adopted for a decade and despite all of the job announcements by our ever-visible governor is 43rd according to the commerce department. 

 

 

Smokers Welcome

Illinois might be making a move that could improve Missouri’s government financial picture. Of course, it could also give us a new nickname: The Smuggler State.

Missouri has, by far, the lowest cigarette tax in the country. We rank 51st (DC is included in the list. When you buy a pack of smokes here, you pay only 17 cents in tobacco tax to the state. Virginia, which is 50th, charges thirty cents. Kentucky charges sixty cents. Both are major tobacco-growing states. Missouri grows a little bit.

The litany at the capitol is that lawmakers will not approve any “job-killing tax increases.” Not even on cigarettes. Some of them are saying, however, that the state might have to leave schools $105 million dollars short of the amount they’re supposed to get in the school foundation formula.

Here’s where Illinois comes in.

Illinois already charges a state tobacco tax of 98 cents on each pack of cigarettes, more than five times the amount Missouri charges. An Illinois House committee has recommended passage of a bill tacking another dollar onto that tax. Backers of the bill think it would raise about $375 million a year.
That higher state tax would go on top of any local tobacco taxes. In Chicago, which already has the nation’s second-highest state/local cigarette tax, the tax would reach $4.66 a pack. Next door Evanston, Illinois would have a state/local tobacco tax of $3.48 per pack.

Illinois lawmakers appear to lack the humanitarian concerns their counterparts in Missouri embrace. They don’t seem to care if they kill jobs in the cigarette sales industry.

That heartless attitude by Illinois is something Missouri needs to turn into economic development.

Here’s how:

It’s time Missouri’s economic development department, its tourism industry, and maybe even the health department launched a joint effort to advertise Missouri’s low-tax cigarette tax. Missouri-sponsored billboards throughout Illinois would encourage people in that state to buy their cigarettes here. Imagine smokers flocking to our border cities where they will load up on cigarettes, producing a giant jump in cigarette sales tax revenue. They might also stay and have dinner or take in a ball game or see a tourist site. Maybe they’ll check into a motel for an hour or two and have a cigarette afterward. Maybe they’ll fill up their car with gas and help our ethanol industry by doing so, pumping more fuel tax money into our state highway system (which also is facing major financial difficulties).

The best part–and this is why the health department needs to sign on–is that they’ll take the cigarettes back to Illinois to smoke them, meaning their later health problems will be issues for Illinois to deal with, not Missouri. So Missouri would profit, generating more money for education, highways, and maybe for health programs, and Illinois would have to deal with the problems smoking causes.
Not only that, but the heavy cigarette sales to outsiders would diminish the supply for Missouri smokers and some might give up the habit out of frustration.

Talk about a win-win situation for Missouri!!

A dozen or so people already face federal charges in St. Louis of smuggling Missouri cigarettes to the Chicago area. The prosecutor says they bought them with our 17 cent tax here, then sold them in Chicago for the higher tax rate there, pocketing the difference. If Illinois jacks up its tax rate by another buck, Missouri smugglers could hit a bonanza.

Smuggling would be economic development. Smuggling would create jobs. Smuggling would bring Illinois money to Missouri as taxable income by the smugglers–if they file returns. Missouri should encourage them to do so. Legalize smuggling. After all, everybody knows the interstate commerce clause is a useless part of the constitution if a state wants to take action that is separate from national standards.

Let’s all root for Illinois to pass this dollar-a-pack cigarette tax increase.
It can mean so much to The Smuggler State.

p.s. Does it seem to you we are missing a bet by now advertising our low cigarette taxes in other states? Here’s how much our eight neighbors charge: Illinois 98 cents; Kentucky 60 cents; Tennessee 62 cents; Arkansas $1.15; Oklahoma $1.03; Kansas 79 cents; Nebraska 64 cents; Iowa $1.38. Clearly we need to do some advertising in our neighboring states. Get those “tourists” in here.