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1 J. Scott Moody, Tax Limitation: The Case of Missouri 1 (1999)

handle is hein.taxfoundation/srjaxz0001 and id is 1 raw text is: TAX 1_qWh FOUNDATION September 1999 No. 90 Tax Limitation: The Case of Missouri Hancock Amendment Keeps Check on Government Tax Bite Since the end of the last recession in 1992, the U.S. economy has been growing steadily. The boom has caused state and local government tax collections to surge, and many states are now faced with large and growing budget surpluses. Policymakers must decide to pur- sue one of two general options-spend the surplus or return it to the taxpayers. Most states, to varying degrees, have chosen the latter option. However, the methods used to return excess tax collections differ from state to state. Some states have simply enacted a temporary refund or lowered tax rates. Alternatively, six states have either a legislative or constitutional tax limitation provision-Arizona, Colorado, Ohio, Oregon, Massachusetts and Missouri. These limitations are automatically determined every year and if certain conditions are met (such as the growth in tax collection exceed- ing growth in personal income) the state is obligated to return the excess amount to the taxpayers. This paper focuses on one such state, Figure 1 Missouri's State and Local Taxes As a Percentage of Income 19 70-1999 -State and Local State - Local Source: Tax Foundation j Scott Moody Economist Tax Foundation 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0 L 7 0 I I I I I I I I I I I I I I ' ' I I I I '70 '71 '72 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 WNWEMEW ... VW= -