280 
THE FISCAL PROBLEM IN MISSOURI 
Tue BurpEN oF THE Missourt Income Tax 
It is generally accepted that an income tax imposed by a 
governmental unit as large as the United States is not usually 
shifted, that is, cannot be passed on by the taxpayer through 
changes in prices. This does not necessarily hold true of a 
state income tax. Industry in Missouri competes with in- 
dustry in other states, and this applies also to persons who are 
engaged in the production of the same or similar products. 
It must be recognized, however, that established industries 
and individual workers lack a high degree of mobility, and 
this lack of mobility is an important factor in the shifting of 
the income tax. 
The question of the shifting of the income tax, or any 
specific tax, furthermore, cannot be considered by itself. It is 
the total state and local tax burden that is significant, not 
the burden of any specific tax, and always various other 
factors are present. If an industry decides to remove from a 
state, 1t 1s usually because a careful analysis of all the factors 
indicates a balance in favor of moving. Even though the 
margin in favor of moving is equivalent to the difference in 
taxes in the two states, and the difference in taxes is due 
entirely to the fact that one state levies an income tax and 
the other does not, it does not necessarily follow that the 
difference in tax burden will be the decisive factor in de- 
termining the question of moving. “The only generalization 
possible 1s that all other factors being equal, the location of 
industry may turn on the question of tax burden.” 
The tax burden is no doubt a more influential factor in 
determining the location of a new enterprise than in causing 
an industry to move from one state to another. In reachinga 
decision as to location, the corporation income tax is sig- 
nificant in that it forms a component part of the total tax 
burden. If in two states all other factors, including all taxes 
other than the income tax, are equal, the location of a new 
enterprise may depend on the presence or the absence of a 
corporation income tax. 
t National Industrial Conference Board. State Income Taxes, 1930, Vol. II, p. 163.