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Cutting The Ties That Bind: End Missouri’s Corporate Income Tax

By Patrick Ishmael and Michael Rathbone Filed November 29, 2012 Source Show-Me Institute

Missouri's long-run economic performance gave policymakers reason to reconsider the state's tax structure. The report argued that the corporate income tax discouraged investment while generating a relatively modest share of state revenue, and that eliminating it would be a more broadly pro-growth policy than continuing to rely on targeted development incentives.

The authors placed the proposal in the context of Missouri's comparatively weak growth in output, employment, and income. Rather than offering selected firms credits or subsidies, the state could improve its competitive position by reducing the tax burden on business activity generally and allowing investment decisions to be driven more by markets than by government incentives.

The paper therefore recommended ending Missouri's corporate income tax as part of a broader shift toward a simpler, more neutral tax system.

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