Located just a couple of miles from the border with Arkansas, the small city of Branson, Missouri, much on which to pride itself. Over the past three decades the city has undergone dramatic development with its population increasing from just over 2,000 residents in 1980 to over 10,000 in 2012. With nearly eight million tourists traveling to Branson last year, the city boasts over 100,000 hotel rooms and over 60,000 theater seats – a remarkable feat for a city of only 10,000 residents.
Branson’s success is undeniable and is a testament to the entrepreneurship of its citizens. The city’s accomplishments are a result of private investment and risk taking at its finest – not government largess. The economic vitality of the city can be seen in the air traffic statistics of the Springfield National Airport, which in 2012 served over 360,000 passengers, making it the third-largest airport in Missouri. This compares to only 87,000 passengers in 1990 – a more than four-fold jump in traffic. By way of comparison, the number of passengers flying to St. Louis has declined by nearly a third since 1990.
With tourism being the economic lifeline of Branson, it is important not to take this success for granted. Branson competes for tourist dollars with such locations as Orlando, FL, Austin, TX, and Pigeon Forge, TN, and the city must continue to make investments that will attract more tourists if it wants its economic success to continue. An example of such an investment is the recently opened Branson Airport, which will bring even more tourists to the city. In fact, Branson Airport is the only privately owned airport in the United States today – a clear example of entrepreneurial risk-taking.
Often overlooked is the fact that Branson has done a great job attracting not only tourists but also retirees. The city was recently highlighted in Where to Retire magazine as a top spot for retirees. Clearly the city’s development, quality healthcare, cultural amenities and great golf courses have not gone unnoticed. The city’s status as a heaven for retirement has been aided by the 2012 repeal of the Missouri state income tax on social security and other pensions. As a result, retirees now make up over 20% of Branson’s residents. Repealing the state income tax for retirees is a good start, but Branson could benefit tremendously if the tax was repealed for all residents – helping the city attract investment and more working families.
Success is fragile and in order to continue its success Branson must be able to compete with other tourist destinations. Competition is never easy – especially against those that are well established, well financed and have tax advantages that Branson lacks. Orlando, Austin and Pigeon Forge are all towns that attract millions of tourists each year and are located in states that do not punish work by imposing an income tax. This means that every month the entrepreneurs in those cities have a little bit more money left over in their pockets – money they can use to hire more people or invest in new attractions to entice even more tourists.
Reducing the state income tax is often framed in the context of class warfare – the rich vs. everyone else. But in this debate, it is important to remember where investment and jobs come from: businesses and entrepreneurs, most of whom file their taxes as individuals and to whom reducing the state tax burden would mean being able to invest even more in growing the economy. Branson has been successful in attracting tourists and retirees. If it wants to continue its success, it must do more to attract workers and investors. Repealing the state income tax would be great place to start.