Restore funding, not more tax cuts

To the editor:

The April 22 story "Lawmakers vote to repeal tax on business' assets, property" offers the worn out argument that Missouri's taxes on businesses discourage economic development in Missouri. Critics claim that the franchise tax is part of a confusing and excessive tax code. If the franchise tax is confusing, then simplify it. But the current tax code is not excessive in the amount of taxes collected.

Missouri has the lowest corporate income tax rate of all 46 states that assess this tax. Last year corporate and franchise taxes comprised only 5 percent of Missouri's general revenue. Corporations should be expected to contribute their fair share to the state's general revenue.

State revenue is expected to grow slightly this year. Rather than restoring cuts made in education and health care to any meaningful degree, the legislature is looking to cut both individual and corporate taxes. While this year's budget includes small increases for education funding, higher education is still strapped. A plan is pending to sell MOHELA assets to fund needed capital improvements, reduce debt and perhaps fund health care for some of the increased number of uninsured Missourians. In this context, it is shortsighted to phase out franchise taxes without identifying a mechanism to make up lost revenue.

When the phase-out is complete, Missouri will lose an estimated $120 million a year. The common good of Missourians is served when we have sufficient revenue to support a strong infrastructure, adequate health care and quality education from birth through college. Achieving those goals will result in a quality of life that will attract and retain businesses.

RUTH R. EHRESMAN, Director of Health and Budgetary Policy, Missouri Budget Project, St. Louis