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Apr
10
Earnings Tax: True Hollywood Story
April 10, 2008 | 10 Comments
The Star’s Kit Wager recently posted on Prime Buzz about a failed attempt to eliminate the Kansas City and St. Louis earnings tax. Unfortunately he didn’t go on to explain why a legislator from BFE would be so worried about wealthy suburbanites paying a municipal income tax. The reason is that Senator Brad Lager (R-Maryville) is on the payroll of Rex Sinquefield, a St. Louis businessman who is on a personal mission to end city and state income taxes. Since January 1st Lager has received over $9,000 from various political action committees associated with Sinquefield.
Sinquefield is also the founder and president of The Show-Me Institute, a libertarian think-tank that is working to abolish income taxes. Not coincidentally, this same week they published a new article arguing for the repeal of the earnings tax. It follows a big study from last year on the same topic.
The other interesting tidbit here is that the chairman of the Show-Me Institute is R. Crosby Kemper III, a former president of UMB Bank and the current director of the Kansas City Public Library. Mr. Kemper doesn’t even live in Missouri or any of the KC suburbs. He commutes from Lawrence, KS.
What do you think? The earnings tax is the biggest source of revenue for the city. If it goes away the money has to come from somewhere, unless we want to close the Police Department and stop paving streets. Kansas City residents, would want to trade the earnings tax for doubled property taxes? Or perhaps a 12% sales tax?
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The arbitrary earnings tax would go away but the sales tax would go up. For example, tax on gas would go up. Someone who drives a lot would pay more gas taxes which would go to fix the roads they are driving on a lot. Someone who drives rarely and rarely buys gas would pay very little to fix the roads they drive on rarely. It is more of a proportional system.
This system also allows people who don’t consume as much to save more of the money they earn.
I like the idea of getting rid of the earnings tax but only if the sales tax is raised.
Gas tax is not sales tax. Gas tax is set by the state, not the city. It is the sales tax on purchases in stores and restaurants that would have to go up.
You just GOTTA have the earnings tax! How else you gonna get those JoCo deadbeats to pay for the MO-side services they enjoy so much? And why throw the taxation over to sales taxes? That is disproportionately burdensome on those with lower incomes. How about this: Make a one-mile stretch of I-35 a toll road right over there by the line. Let ‘em pay automatically w/ one of those I-Pass systems. Get ‘em on their commute each and every day.
The sales tax is incredibly regressive. People have to buy the basics like food and clothing, things you can only cut back so far when the tax rises. The sales tax is almost 8% now, how high will it have to go?
It would be really cruel to raise sales taxes on the poor and working classes just so rich Mission Hills people can get a break on their income taxes.
Besides, the trend is towards more cities starting earnings taxes. KCK is looking at it very seriously, and Springfield, MO is also starting to consider it.
Well, if you had read the actual study on the subject that you link to above, it makes a pretty detailed case for why it would be a good idea to replace an earnings tax with a land tax — it’s “non-distortionary,” meaning it won’t drive people out of the city as quickly as an earnings tax will.
KC is just drive-thru territory for must of us. I would not work or live in Kansas City Missouri.
It’s a lot of work, but legalizing the use of a land tax is the best thing they could ever do in Jeff City.
My thoughts: Stop giving tax breaks to companies in KC and make them pay their share rather than pushing it onto the employees. I will read about the land tax. If 43% of the city’s revenue is from the 1% tax, and 54% of that is from people out of KC, then at least 23% of the city’s income is from outside of the city, not counting other sources of revenue. That is ridiculous, I don’t charge my friends 25% of my rent to come to my house. Also, the gas tax, a sales tax, is determined by the city, the county, and the state, the same as every other sales tax. Lastly, poor people work in KC, MO as well, not just rich people. Think of concessions people, street cleaners, waiters/waitresses, parking attendants, etc. Get rid of the stupid tax on people not living in KC, MO and make the people living there come up with the difference.
Great backstory, bloggyKC.
Why didn’t we hear this from the Star? What you exposed was something we need to know about.
Kemper actually has two residences, one in Laurence and one in KC, MO, near the KC Public Library, where he is doing a phenomenal job.