2 min read
Posted on 03.31.16
  • 2 min read
  • Posted on 03.31.16

 The City's earnings tax has come under attack by a "Vote No" committee with an undetermined interest in the outcome.

Ads Vote No is broadcasting or mailing claiming that a lawyer doesn't pay earnings tax while a janitor does are simply false. And inflammatory. Everyone working or living in the city of St. Louis pays a 1% tax on their earnings. Saying anything else is a lie. Implying anything else is as close to a lie as you can get without falling in.

In 2011, the Missouri Council for a Better Economy, a group funded by retired businessman Rex Sinquefield, commissioned a study which explores a 10-year phase out of the earnings tax. This study did exactly what it was supposed to do: It examined and put forth alternative taxes that could be put into place if the City lost its earnings tax.

But, the study also did something else, and something never mentioned by the Vote No campaign: It did not recommend phasing out the earnings tax.

The study shows that all of the alternative revenue sources proposed are not only not sufficient to replace the earnings tax, but that they may have worse economic effects if put into place instead. The study notes that the earnings tax is “broad based without exemptions,” while critiquing ideas such as raising the property tax and sales tax for their negative, regressive economic impact.

The study goes even further to examine the city’s expenditures. And, once again, we find the study on our side. It notes that the city “has made extensive budget and personnel cuts in recent years… it is unlikely that the budget contains significant additional personnel-related reductions that will not have an impact on provision of services.” I agree.

In 2011, City voters approved extending the earnings tax for five years. I expect City voters will again approve an extension on Tuesday, despite a million dollar campaign based on a divisive lie. 

Vote Yes on Proposition E.