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Tue April 1, 2014
Study: Missouri Gave Up $1.7 Billion In Corporate Taxes Since Recession
Originally published on Tue April 1, 2014 10:36 am
Missouri's efforts since the recession to be more business-friendly have cost the state about $1.7 billion in corporate tax revenues.
That's according to a report co-published Monday by the Center for Effective Government, National People's Action and GrassRoots Organizing.
Researchers found that corporations are paying Missouri about 26 percent less in income taxes than they did at the beginning of the recession six years ago.
Tax abatements and sales tax exemptions for companies such as Ford Motor Company and Express Scripts have driven a decline in education and infrastructure investment, said co-author Liz Ryan Murray, Policy Director for National People's Action.
"There's been a race to the bottom in corporate giveaways in hopes of retaining jobs,” she said.
“That doesn't always work out and it just further erodes and erodes and erodes the tax base which ends with us having a lack of investment in infrastructure, a lack of investment in education and our kids and a lack of investment in our people."
According to the study, Missouri loses roughly $439 million each year to loopholes that enable corporations to hide taxable revenue generated in the state in offshore accounts.
Missouri’s declining corporate tax base, however, is not unique, said Murray.
“It’s certainly a trend that we have seen across the country: A lot of governors and legislatures are looking for ways that they feel is going to give them an edge,” she said.
The Missouri Senate is considering a tax cut plan that would reduce state revenues by $620 million dollars annually. Provisions of the bill include lowering the state income tax from 6 percent to 5 percent and exempting the first $25,000 of corporate income from taxation.