Reining In Government Tax Credits
Many government tax credits serve laudable goals. Often, they incentivize private citizens to direct their money toward worthy causes, such as charities and government-sponsored projects. But these credits come at a cost. When we waive millions of dollars of tax revenue through these programs, the state government has to compensate by either finding additional funding sources or cutting state services, such as health care and education. While many tax credits are acceptable — and even beneficial — in moderation, it’s possible to have too much of a good thing.
That’s why I’ve sponsored a few proposals to reform tax credit programs this legislative session, such as Senate Bill 590 and Senate Bill 591. Some of these credits, such as those for low-income housing and preservation of historic sites, have ballooned out of control. Managing these programs so that they are efficient and responsible is a key priority. Doing so will make government a better steward of taxpayer dollars — your hard-earned money.
Some tax credits that do serve a valuable role just need revision, rather than outright repeal. Often, it’s easy for those with the knowledge and time to find loopholes to take advantage of some archaic tax credit statutes, passed many years before we could reasonably foresee how large their costs would become. Leaving these loopholes in place doesn’t incentivize noble giving, but rather the opposite; when this occurs, your state government is basically subsidizing the salary of wealthy lawyers. A responsible government would stop this in its tracks, diverting these funds to more worthy goals, such as broad based tax cuts or infrastructure spending.
As always, please feel free to call, email or write with your ideas or concerns. My Capitol office number is (573) 751-1415, my email is dan.hegeman@senate.mo.gov and my mailing address is Room 332, State Capitol Building, Jefferson City, MO 65101.