What exactly is a tax an income? Most people understand income taxes to simply be a tax on wages and although that is a true assessment, I would argue that income taxes represent a lot more than the government taking a few dollars out of our paychecks. 

Let me explain this. If I were going to pay you to mow my lawn, we would first have to agree on a price for your labor. You might look at my lawn and consider things like risk after all, there are going to be blades spinning near your feet. You might consider the time involved and maybe even how miserable it be to mow a lawn in the middle of summer when the temperature is 105 degrees. Lets say you agree to mow my lawn and considering the risk involved, the hot sun and assuming the job will take you an hour, you ask for $20. 

After my lawn is mowed I give you $20 that you carry away and deposit into your bank. That $20 isn’t just a paycheck. It represent much more than a number in fact it’s direct manifestation of your labor.  That $20 represents the value of an hour of your time and productivity.  


When the government taxes your $20 then, it is really taxing your labor and productivity. Fundamentally speaking, an income tax is when the government is charging you for your productivity and time. If the government charges your time and productivity is too high in Missouri for example, it only makes sense that you might consider finding another state to be productive in; another state that doesn’t charge you as much for your own work.  States that cooperate with your productivity are likely to have more prosperous economies than states that compete with your productivity. 

"That $20 isn’t just a paycheck. It represent much more than a number, in fact it’s direct manifestation of your labor.  That $20 represents the value of an hour of your time and productivity.  "

When legislature begin to discuss tax reform and policy geared toward economic development, it is important they understand these simple principles and they really are simple:

Money works a lot like food, when the government devours more and more of the peoples money, the bigger the government grows and the less productive the people become for themselves; the more money people feed into their local economies as they buy and sell things to meet their needs however, the stronger our local economies grow.  Lower taxes stimulate economic growth.


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The Missouri House passed its budget this week granting approval to a $23.2 billion budget.  This budget reflects the continuing commitment of the House Majority to pass a budget that’s not only balanced, but sets aside $49 million in savings and continues to reflect the top priorities of the Missouri House of Representatives.

States across this country are faced with budget shortfalls on an unprecedented scale.  Tough decisions made in the past, and tougher decisions made during this budget process have led to a budget that House Majority members can point to as a roadmap for continued fiscal recovery.  The House balanced this budget while being able to hold K-12 education harmless to the 2011 funding levels, while instituting only modest reductions to our higher education institutions, while protecting low income health care and while maintaining funding for other vital state services such as correctional facilities and public safety.

Further state restructuring and programmatic changes will be needed to move Missouri through this current financial crisis.  Continuing work by the House Appropriations Committees and by the Interim Committee on Budget Transparency will enable this process to remain fluid and will allow members the needed knowledge of state services to continue to make fiscal decisions.

HIGHLIGHTS INCLUDE:
  • Left more than $49 million on the balance sheet, a balanced budget that continues to meet the needs of all Missourians.
  • Held funding for the Foundation Formula harmless.  
  • In light of recent historical declines in state revenues, the House Majority was able to again make education the #1 priority.$365k in cuts to the Missouri House of Representatives budget, further proof the House is taking the lead during this financial crisis.
  • Reduced funding for Department Directors and Deputy Directors to a maximum level of $86,500, saving state taxpayers over $1.0 million.
  • Held the Governor accountable for his excessive use of the state plane by restricting expenses from other state departments.


EDUCATION
The House of Representatives continues their strong commitment to public education and this budget is a clear reflection of how the Missouri House is prepared to deal with the nation’s economic downturn.  Included in this is the House Majority’s continued commitment to make K-12 education the highest priority.  Holding the Foundation Formula harmless during these challenging economic times further proves this promise.  Total funding for the Department of Elementary and Secondary Education will exceed $5.2 billion.
Also included is the House’s commitment to the state’s higher education system.  The House exceeded the Governor’s funding levels for institutions by implementing the Preparing to Care program, a $12M increase over the Governor’s recommendation.
HIGHLIGHTS:
  • Over $3 billion for the School Foundation Formula.  This completes the House’s plan to fund both the FY 2011 and FY 2012 Foundation Formula at the same amount, mitigating wild funding disparities that would have occurred in the Governor’s initial plan.
  • Funding for education also includes:
  • Over $16 million for the Parents As Teachers program. 
  • A modest 7.0% reduction to higher education institutions.
  • $7M increase for the A+ Program. This will fully fund all eligible students.
ECONOMIC DEVELOPMENT
The Missouri economy—fueled by key budgetary and policy decisions passed by this General Assembly—is continuing to move in the right direction despite challenging economic times nationwide. Combined with the Quality Jobs Act, continued funding for job creation and incentives for innovation will be vital as we strive to climb out of this global financial recession.
HIGHLIGHTS
:
  • House funded over $2.1 million for innovation centers, the State MOFAST program and the Missouri Manufacturing Program.  These programs will continue to assist businesses in job training/job retention programs throughout the State.
  • Continued full funding for the Community College Jobs Retention Training ($10M), Community College New Jobs Training ($16M) and Jobs Development ($14.5M) programs.  Combined, these programs will continue to aid in statewide workforce development.