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Sorry Rex, Readers Oppose Proposition A

September 28, 2010 Politics/Policy, Taxes 17 Comments
ABOVE: Rex Sinquefield is the man behind Proposition A. Image: Riverfront Times

The poll last week showed most readers disagree with Rex Sinquefield about Proposition A on the November  Missouri ballot.  What does he think of the municipal earnings tax in St. Louis & Kansas City?

“Instead of paying income and earnings taxes — in which the more you make, the more you’re taxed — Sinquefield wants to boost sales taxes.

In his mind, this is a more equitable way of taxing the public — a theory that makes lots o’ cents if you’re loaded but not so if you’re middle-class (or below) and forced to pay additional sales taxes to make up for the elimination of income taxes. (RFT: Hey St. Louis, About That Billionaire Knocking on Your Door…)”

The following was the results:

Q: Missouri Prop A would require votes in KC & STL to retain the 1% earnings tax. Thoughts?

  1. Missouri voters should reject Prop A 135 [62.5%]
  2. The earnings tax needs to go and passing Prop A is the first step 40 [18.52%]
  3. Passing Prop A is OK, that allows local voters to decide to keep the tax or not 33 [15.28%]
  4. Unsure/no opinion 5 [2.31%]
  5. Other answer… 3 [1.39%]

And the “other” answers:

  1. Keep it but eliminate it for people living in the city.
  2. The whole thing is a charade perpetrated by a rich Tea Party jerk
  3. For most of the state, this is voting on taxes for other people.

Vote no on Prop A November 2nd!

– Steve Patterson

 

Currently there are "17 comments" on this Article:

  1. tom says:

    ' theory that makes lots o’ cents if you’re loaded but not so if you’re middle-class (or below) and forced to pay additional sales taxes to make up for the elimination of income taxes.'

    The Riverfront Time's columnist conclusions are illogical. The rich on average have considerably more disposable income than the middle class and especially more than the poor. Thus –> they won't benefit unless they're very frugal (ex:Warren Buffett)

    This is essentially a fairtax proposal. See link for suggested benefits and drawbacks:
    http://en.wikipedia.org/wiki/FairTax

     
    • Jeremiah Russell says:

      I agree with Tom. This is a Fair Tax proposal. I don't buy the thinking that it will hurt the poor by forcing them to pay higher prices for goods and services. I also don't buy that a proposal like this would cut down on social services either. Proposals of this nature are designed to be revenue neutral. In other words, the money you are saving by not paying income tax is being offset by the sales tax.
      It's a win win for local and state gov'ts as well as us, the tax payer. Look at your pay stub and calculate the percentage of tax that comes out of your paycheck and then calculate a 1% increase in sales tax….i'm thinking you'll come out ahead on this.

       
  2. samizdat says:

    A sales tax is highly regressive, and would probably not bring in as much revenue, and helps exacerbate the already huge problem of income inequity in our society. Not a good direction, Rex. As usual, we have here another “conservative” who has little knowledge of history and doesn't realize why society has collectivized the many services now provided by cities. He obviously doesn't want to pay taxes on these services, and would like to privatize many of them, not realizing many of them were, at one time, and it created a whole host of problems: unsanitary conditions in urban areas, lax or incompetent fire prevention and suppression, widespread and endemic infectious disease populations, no codes for the prevention of above same, etc. No one likes paying taxes, and it's a popular tool for demagogues, but that's no reason to dismantle the protections we have enjoyed and from which we have derived benefit for over a century. More shortsighted foolishness from another Movement conservative. The exurban and rural populations will eat this sh** from a spoon, though. Bon apetit, folks.

     
  3. Fenian says:

    I'll ask it again, why are we one of three major cities in the US (STL, Kansas City, and Wilmington, Delaware) with this form of earnings tax? Would people be opposed to a more equitable earnings tax that charges commuters less than residents?

     
  4. Tpekren says:

    Missouri voters will vote yes. The question, that Slay frames correctly, is what residents say in April is what really matters. They can either vote to keep their earinings tax and have residents and non-residents alike share the burden that might or might not bode well for the city business climate or force tax reforms upon itself.

    As far as myself, I would have voted yes for the simple fact, until this proposition, that my wife had no representation on being taxed on her income by the city. However, I don't get to vote because my family moved out of the region in order to find work. I was fortunate in that my career connections led me to three opportunities. However, not a single one was in the area. At some point, perception or not, the community has to realize its competing against the likes of not only Clayton and Columbia but also Twin Cities, Dallas, Houston. At some point when do you support jobs because St. Louis has two less well paid professionals supporting the community. In other words, businesses don't care if it is more equitable or not for the city but what its bottom line is and what its employees desire. To further my point, some of the big law firms (who happen to have large well paid staffs) that didn't move out in recent shuffles were given tax abatements.

    What I truly find ironic is that the city is giving out tax abatements to keep well paying employers in the city even as supporters of the earnings tax try to convince non-residents to vote in their favor of continued taxation.

     
  5. GMichaud says:

    How do other cities manage without this earnings tax? Surely there would be protests if one economic group was burdened unfairly. All the rest of the cities in the nation have it wrong, but St. Louis has it right? That's hard to believe given the destruction of St. Louis over the past 50 years.
    The Federalist Papers no 36 Alexander Hamilton says “double sets of officers” would be noxious to the citizens. What he means is government officials collecting taxes at more than one level government is inefficient and undesirable. We actually we have a state income tax too, maybe that should also be eliminated.
    I'm not a fan of Rex and I think he brings his points up for the wrong reasons, nevertheless we are foolish to think everything should stay the same, St. Louis has went downhill for along time, America is not far behind. The management of both is questionable,in fact it has become clear that government is managed for the wealthy insiders and not what benefits the citizens. (While much derided “socialist” countries such as Sweden truly serve their citizens).

    For instance if there needs to be an income tax at the state and/or city level how hard would it be to have line items for each state (or city) calculating such on the federal return and then send checks directly to each level of government. Voila! eliminate “double sets of officers”.
    The Federal tax should be rethought also, it is completely ridiculous now, it is a partner in feeding our corporate masters.
    Personally I think Alexander Hamilton is still correct.
    Double sets of officers are noxious, eliminating them eliminates the need for so much government revenue.

     
  6. JZ71 says:

    Taxes are personal. We're happiest when we can tax someone else. We're the most unhappy when we think that we're being taxed “unfairly” and/or excessively. And taxes are, at their core, pure socialism, reallocating individual wealth for “the greater good”.

    The city earnings tax is not inherently unfair – it taxes consumers of city services and it does so in a transparent and straight-forward manner. Its two biggest negatives are that NONE of our regional, suburban neighbors impose a similar tax, relying, instead, on higher property taxes and, in many cases, stronger sales tax collections, and it taxes non-residents who can and do vote in statewide elections. It's no surprise that someone who spends less than a third of their week working in the city resents paying the same rate as a person who lives in the city 24/7.

    The city is taking the right tack in not fighting Prop A. While having to hold an election next spring will be a minor PITA, if the right arguments are made, it shouldn't be too difficult to convince voters to extend the tax. The tagline from a similar campaign still has perverse merit: “vote no, it's your dough”!

     
    • To my knowledge St. Louis & Kansas City are free to modify or eliminate the earnings tax at any time. I support reviewing policies but I've not seen a fair replacement for this revenue.

       
      • Tpekren says:

        Steve, That is why you elect a Mayor and Aldermen and why the budget is their responsibility. Not a fan of Rex, but think it speaks poorly upon supporters of the city earnings tax that Rex for whatever reason has to propose anything beyond what he got on the ballot. I wonder what your opinion would be if a smoking ban could not go on a ballot until the non-smokers could propose a fair way to accomondate smokers as they find acceptable. That is the point of a referendum. Let voters decide what they want when enough signatures have been put forth for the question being asked. In this case, the right of earnings was given to KC and St. Louis by state law and its very nature is taxation of state residents, both city and non-city residents alike.

        In fact, why don't you propose a plan if it comes to a need. Your free as everybody else to state something. In fact, it will probably help keep the earnings tax in place (unfortunately in my opinion) once the city residents who most likely vote in April will realize where the differences will be made up. Either by property tax, sales tax, cuts in service and spending or all of the above.

         
    • Fenian says:

      I would argue that the earnings tax is unfair. Commuters are subsidizing the services of residents. If commuters were not subsidizing services for residents, you would have seen charges for trash pick up years ago, just like in many other municipalities. If the tax were at least tiered, it would not be unfair in my opinion.

      Again, St. Louis has a type of earnings tax that is virtually unheard of elsewhere, yet it is treated as if it were the only option to keep the City afloat. Prop A is a little too drastic in my opinion, but the City really does need to reassess how it generates income.

       
      • Tpekren says:

        Thanks Fenian, I was always amazed by the fact that some how city residents seemed lost, until this year when they actually got charged a independent trash fee, on the fact that non-resident employees are not happy and will never be happy supporting residential services such as trash service and non metered water via earnings tax only to go home at night and pay separate trash fees and have their water metered on their residential property. This is on top of the fact that property bills in the county include the museum district supporting items that clearly benefit the city as well as the county.

         
      • JZ71 says:

        Unfair is a matter of interpretation. We all pay taxes to jurisdictions where we don't live, be they sales taxes in Kirkwood or Chesterfield, gas taxes in Illinois or taxes on rental cars and hotel rooms in Orlando or Las Vegas. If you don't want to pay them, you have the option of not entering their borders; the same applies in the ciy – if you don't like paying the earnings tax, and don't live in the city, just find a job outside the city, problem solved!

        Unlike the federal tax code, the city earnings tax is very straight forward, with few exemptions, so it's probably more “fair”. And unlike TIF's and historic tax credits, where certain properties are given preferntial treatment (for specific reasons), the earnings tax hits all residents and workers equally, which fits most definitions of fair”. The only real point of contention is whether sales taxes or income taxes are more “fair”.

        Still, there are valid reasons why it makes sense to move away from the earnings tax, the biggest one being that NONE of our neighbors impose one. While it is only one factor in any site-selection decision, we don't need to be giving anyone reasons to cross the city off their short lists. We can't do much, quickly, about the perceptions of either our public school sytsem or our crime rate. There's only so much we can do about all the vacant lots and collapsing buildings, across the city, that scream decay and poverty. But we can move away from a tax that hits decision makers disproportionally. Collecting $350 from someone making $35K is one thing. Taking $35,000 from someone making $3.5M is a whole 'nuther thing (even if it's eminently “fair” and affordable)!

         
        • Tpekren says:

          Deciding not to pay sales tax by not patronizing a location is one thing. Deciding on where you live is in the same relm, However, claiming that you should quit your job if you don't like the earnings tax is another. Would you freely give up your job in any circumstance? Do people have choice of mulitple jobs in multiple locations? I expected a better reply then that.

          I do agree with your point that the city earnings tax is as ideal as you can get with income derived taxes. I would very much like to see that model at the Federal and State level versus what we have now. Pick or vote on a percentage, take it out of my paycheck and be done with it. We are only hurting oursleves by are extremely complicated tax codes that are only getting more complicated

           
          • JZ71 says:

            I'm not talking about quitting a job, I'm talking about taking a job. Every job comes with restrictions – a sexist uniform (Hooters), residency (city government), being around smokers (a bar), paying for parking (downtown), not having public transit available (Jefferson County), strange hours. The earnings tax is a given – if you don't like it, no one is forcing you to take a job in the city. Yes, the economy sucks, and there are few, if any options, out there. But if you don't want to pay the tax, or pay to park, you do have choices. You just have to prioritize them.

            Right now, I'm a non-smoker “forced” to work around smokers. It's a choice I, alone, made. The paycheck is worth it, at least until something better comes along. The only real sympathy I feel toward non-residents are the ones who had their worksite moved into the city AFTER they were hired. Everyone else took their jobs knowing full well the city would get their 1%. It's a tradeoff, for a job, or for a better job. It's only “unfair” in that you're not making the rules, but by taking the job, you agreed to them!

            That said, if enough employees can convince their employer, or if the employer wants happier employees, moving out of the city is one way to do it. This is the one big reason the city needs to wean itself from the earnings tax, Rex or no Rex. Yes, we have a lot to offer, but we also have a lot of competition and a lot of negatives, as well. Being less than 15% of the region, now, we can no longer assume that we can simply say take it or leave it . . .

             
  7. Chris Grus says:

    I agree pretty much with “Other” answer #2, with the following caveat: a. removing the earnings tax could be good if we find a better source of funds / find 30% of the current budget that is totally unnecessary FIRST. and b. if the vote every 5 years is reduced to one vote and not a perpetual process.

    Just having one vote would silence the people saying that we've never had a chance to decide as a community, and finding an alternative source of funds before we start removing what is in place is just plain responsible.

    While Rex and his minions have a pretty good political plan at getting this amendment passed, its not good at all for St Louis.

     
  8. GMichaud says:

    To Brian Wahby especially, who could do something about the earnings tax. The city of St. Louis has to look to the future, this is an issue that continually comes up. If all or most American cities had this tax you might say what is the problem? but it is exactly the opposite, most American cities do not have an earnings tax. What is wrong with debating alternatives? Is this a democracy or what? Discussion is off limits because the phoo-bah's said so?
    Everything should be on the table, America needs to be rebuilt from the ground up, the purchase of elections and policy by the highest bidder should not be the method of democracy. Truthfully the whole system of taxation in the United States should be on the table. It's convulsive mess seems to be taken as a given.
    Again the “double sets of officers” Hamilton writes about pertains to the whole system of governance in the United States (the Federalist Papers No. 36).
    There is unquestionably too much duplication of government services. This earnings tax is a prime example.

     
  9. Wondering says:

    I am wondering, where the Chairman of the Democratic City Central Committee is on this proposition? He has been noticeably silent on this. Is it because his wife works for the mayor and he is concerned about her job?

     

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