PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

STATE OF THE WEEK: Missouri Takes a Step Backwards

By at 19 August, 2018, 8:21 am

 

by Raymond J. Keating-

Small Business Policy Index 2018: Missouri ranked 19th among the 50 states.

SBE Council’s “Small Business Policy Index 2018” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements. 

Small Business Tax Index 2017: Missouri ranked 21st among the 50 states.

SBE Council’s “Small Business Tax Index 2017” ranks the states according to 26 different tax measures. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

Missouri recently has made some positive steps forward in terms of trying to make the state friendlier toward entrepreneurship, small business and investment. Unfortunately, it also experienced a dramatic reversal in one policy area – shifting from a plus for business and workers to a negative.

A Setback for Right-to-Work

According to the Small Business Policy Index 2018: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, which I write for the Small Business & Entrepreneurship Council, Missouri ranks 19th among the 50 states. Among Missouri’s key positives are no death tax, no annual LLC fee, fairly low property taxes, the third-lowest gas and diesel taxes, a low energy regulation burden, and a low level of state and local government spending. In addition, the state has passed some small, but positive reductions in income and capital gains tax rates.

As for the negatives, Missouri claims poor protections against eminent domain abuses, high wireless taxes, and a relatively high crime rate.

And then there is the state’s right-to-work status. As noted in the “Small Business Policy Index”: “A right-to-work state means that employees generally are not forced to become labor union members or pay dues to unions. Such worker freedoms offer a more dynamic, flexible workforce, and a more amenable environment for increased productivity and improved efficiency.”

In early 2017, the Missouri legislature approved and then-governor signed into law a measure that made Missouri the 28th right-to-work state. Naturally, labor unions weren’t pleased. And they proceeded to gather enough signatures to put the law on hold until a statewide referendum decided the matter.

National labor unions reportedly dumped more than $15 million into the anti-right-to-work measure (including a radio ad by actor John Goodman?), and the state’s right-to-work law went down to defeat by a 67%-33% margin.

That’s unfortunate for small businesses and workers in, and the economy of Missouri.

However, it also must be noted that the days of forced union dues might be numbered, especially, given the U.S. Supreme Court decision in late June that collecting agency fees from public-sector workers who choose not to join a union was a violation of their First Amendment rights.

That’s a blow to the bottom lines of government unions that tend to be the loudest and well-funded special interests working in favor of higher taxes, increased regulation and more government spending. Also, as The Wall Street Journal noted, “Though Wednesday’s ruling will have no direct impact on private-sector unions, it could accelerate a trend across the country toward nonunionized workplaces. About a third of public employees are union members, but just about 6.5% of private sector workers belong to a union.”

No doubt, labor unions in Missouri achieved a victory over entrepreneurship, business, workers and economic growth, but it was an exception in a tide moving against labor unions. This victory, hopefully, will be short lived.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

 

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