How the Kansas City Chiefs and Royals Restarted a (Subsidies) War

In Federalist Paper No. 7, Alexander Hamilton warns that commercial policy could be a source of contention and even violence among states. This warning was farsighted: Although interstate violence has been rare, many states have engaged in "subsidy wars" to attract businesses. Take the Kansas-Missouri subsidy war as an example. From 2009 to 2019, both states engaged in a costly and wasteful corporate subsidies competition in the Kansas City metropolitan area. In 2019, political leaders from both states agreed to a six-year truce. Unfortunately, this truce has ended a year early as Kansas attempts to lure the Missouri-based Kansas City Chiefs and Royals. The First Kansas-Missouri Subsidies War (2009-2019) Kansas City straddles five Kansas counties and nine Missouri ones. Because of this geographical arrangement, the two states regularly compete for businesses. Competition escalated significantly in 2009 when Kansas created the Promoting Employment Across Kansas (PEAK) program. PEAK allowed businesses to keep 95 percent of their state income tax withholding for seven years. Missouri responded in 2013 with a program that allowed companies to keep all payroll withholding taxes. These two programs were the first skirmishes of the Kansas-Missouri subsidy war.