FAIRWAY, KS — Texas and Missouri no longer square off as Big 12 opponents, but governors Rick Perry and Jay Nixon—with some help from Missouri’s media—have ignited a new interstate rivalry.
Perry, a Republican, has recently taken his ongoing job-poaching tour to the Show-Me State, running radio and TV ads in Missouri markets, and making an appearance in Chesterfield, MO, to encourage local business owners to relocate to Texas.
The Texas governor’s visit was just a prelude to this month’s upcoming battle in the Missouri Legislature to override Nixon’s veto of a major tax-cut bill. The state Chamber of Commerce and other anti-tax groups sponsored Perry’s visit as part of an effort to persuade the Republican legislative supermajority to band together and override the veto, on the theory that the bill will make Missouri more competitive with states like Texas and neighboring Kansas. Perry, meanwhile, used the trip to make his own pitch to Missouri businesses.
Nixon, a Democrat, has reacted aggressively to counter Perry—and the local media has been quick to take Nixon’s side. St. Louis radio station KTRS pulled Perry’s ad on Aug. 23, declaring that “we feel the need to stand strong with other small locally owned business and defend our region.” Last week, Nixon rewarded KTRS with an ad buy of his own, lashing back at Perry and echoing the radio station’s warning not to “mess with” Missouri. At the same time, editorials in The Kansas City Star and St. Louis Post-Dispatch sided with Nixon, criticizing Perry and the groups in Missouri who were supporting him, and Charles Jaco of St. Louis’s KPLR-TV came out with a parody video lampooning Perry’s ad (also featured on the Post-Dispatch website).
It’s been entertaining to watch. But arguments in this regional war—from politicians and the press alike—have often been painted in broad strokes, with context and even simple facts getting lost in the fray. Here’s a look at what the different players have said, and where they’ve sometimes gone wrong.
Top 10 or ‘Terrible Ten’?
A centerpiece of Perry’s campaign is that Texas, which has no state income tax on individuals, ranks in the Top 10 in the conservative Tax Foundation’s State Business Tax Climate Index. The truth of this claim is easily confirmed, yet the Tax Foundation itself has complained that Perry is not telling the whole story.
“The Texas tax code has problems of its own,” wrote the foundation’s Lyman Stone
in June, zeroing in on the state’s “Margin Tax” on businesses, which he said “is excessively complex and non-neutral, and creates major compliance burdens on the firms that pay it.”
Indeed, the Tax Foundation gives Texas a fairly poor ranking—38th out of 50—on its measure for corporate taxation, which accounts for “the impact of each state’s principal tax on business activities. On this measure, in fact, it is Missouri that makes the Top 10, coming in at #8. According to the foundation’s measures, Missouri also outranks Texas in two other key categories: sales taxes (factoring in both statewide and local levies) and property taxes.
The Post-Dispatch and the Star highlighted these facts, which Perry had left out. The Post-Dispatch, however, in its zeal to turn Perry’s argument on its head and argue that “Taxes are higher in Texas” than Missouri, engaged in some selective citation of its own. The St. Louis paper left out the fact that the Tax Foundation still ranks Texas higher than Missouri on its overall business-climate measure—9th compared to 16th.
Stone of the Tax Foundation told me in an e-mail that the Post-Dispatch and Star pieces “look at several of the major categories we look at for our index: but they don’t mention that we weight those categories for the index. Texas, for example, does very well in our index because we put a very heavy weighting on the individual income tax. So it’s true Missouri actually beats Texas in several categories: but ask yourself which is more important, income taxes paid by millions of individuals and thousands of small businesses, or unemployment insurance?”
The foundation, Stone told me, gives the greatest weight in its index to the individual income tax, at 33 percent, followed by sales and corporate taxes at about 20 percent each, property taxes at 14 percent, and unemployment-insurance taxes at 11 percent.