ST. LOUIS 鈥 Missouri lawmakers questioned 狐狸视频鈥 decades-old earnings tax during a legislative committee hearing in the city on Monday.
The Republican-led Missouri House is evaluating the 1% levy on earnings for individuals who live or work in the city, potentially teeing up the tax issue for the 2024 legislative session.
Under current state law, city voters must renew the levy every five years. City voters have overwhelmingly approved it three times since then, but the tax would be phased out over 10 years if voters ever reject it.
Committee chairman Jim Murphy, a south 狐狸视频 County Republican, has said the panel will not seek to end the tax, but find ways to eventually replace the tax or help the city grow its way out of having to assess it.
While proponents have argued the tax is vital to city operations, critics have said the earnings tax has impeded growth.
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The earnings tax generated $206.5 million in revenue for the city .
Rep. Ben Keathley, R-Chesterfield, said if a large number of people were paying the tax without getting to vote on it, there is a 鈥渢axation without representation situation.鈥
鈥淎re the people approving the tax the people paying the tax?鈥 Keathley asked.
Paul Payne, budget director for the city of 狐狸视频, said that 79% of the earnings tax comes from individuals and 21% comes from corporations.
He said probably about two-thirds of the revenue coming from individuals is coming from nonresidents.
鈥淵ou鈥檙e talking a little over a half of our earnings tax, maybe鈥 is coming from nonresidents, Payne said.
鈥淚 would keep approving a tax in my community, too, if鈥 I thought someone else is going to be paying it, Keathley said.
Rep. Steve Butz, D-狐狸视频, said the earnings tax isn鈥檛 as big of an issue for people leaving the city as crime or schools.
鈥淧aying the earnings tax simply never comes up,鈥 Butz said.
But, Keathley said, 鈥渁 reason I don鈥檛 have my law practice in the city鈥 is because being located in 狐狸视频 County automatically results in a 1% raise.
The hearing Monday was the second of three to be held by the Special Interim Committee on the Earnings Tax.
The Legislature reconvenes for its annual session in January.