Group claims tax loopholes hurting education, health

JEFFERSON CITY, Mo. -- Some of the state's largest companies are using loopholes to avoid paying taxes that could help boost education and health care, according to a report Wednesday by an advocacy group.

The Coalition to Protect Education and Health Care said 98 of the 540 largest companies in Missouri -- each reporting more than $50 million in federal taxable income -- paid no Missouri income taxes.

Additionally, the group said, Department of Revenue figures show that 16,482 corporations -- or two-thirds of all companies the declared taxable income -- paid less in Missouri taxes than the $1,462 paid by an average individual.

The group said that by closing so-called tax loopholes, an additional $187 million in corporate taxes could be raised annually to help education and health care.

Democratic Gov. Bob Holden has long sought to close "tax loopholes" to generate money for the state. He called the legislature into a special session, which began this week, to consider eliminating some of those tax breaks and asking voters to raise taxes on casinos, cigarettes and wealthier Missourians.

The Republican-led legislature so far has declined to take up Holden's proposals, saying they would impose a greater burden on businesses and thus hurt the state's economy.

"We are asking corporations to pay their fair share," said Katie Plax, co-chairwoman of the education and health care advocacy group. "This report provides critical information and viable alternatives for the General Assembly to consider in this special session."

The Coalition to Protect Education and Health Care is composed of several labor unions, a St. Louis religious organization, the Missouri PTA and a statewide advocacy group for the poor, among others.

The Taxpayers Research Institute of Missouri -- an arm of the Associated Industries of Missouri -- said if the report's recommendations were enacted, they would hurt business and cost the state jobs.

"I think this report is short on facts, and I think it will result in additional job losses in Missouri," said Dave Smith, executive director for the business research group. "Corporations have the right to conduct business. Taxation binds you and takes away your freedom."

The report was released during the third day of the special legislative session, as the Republican-led House Budget Committee was approving a revised budget that includes none of Holden's tax proposals.

A Senate committee is scheduled to consider legislation containing some of Holden's "tax loophole" proposals next week.

A bill sponsored by Sen. Wayne Goode, D-St. Louis, would end tax breaks on things like yacht purchases and for companies that ship other companies' merchandise. Both issues were cited in the report issued Wednesday.

The bill -- along with other tax bills -- will be heard Monday by the Republican-controlled Senate Ways and Means Committee, whose chairman said it is unlikely that any of the measures will make it to the full Senate for debate.

"I've been in close contact with the Republican members of the committee and I think they are all unanimous that we'll hear those bills and see that they remain in committee," said Sen. Carl Vogel, R-Jefferson City. "I think we've had this debate for five months and think it's time to put it behind us."

------

On the Net:

Tax Report: http://www.protectmissouri.org

Missouri Legislature: http://www.moga.state.mo.us