The Missouri Legislature can’t seem to stop itself from sticking its nose in the city of ºüÀêÊÓƵ’ business. First the lawmakers said the city, despite its homicide rate, couldn’t have stricter gun laws than the rest of the state. Then they said the city couldn’t raise its minimum wage. Now there’s an effort underway to stop the city from levying its 1 percent earnings tax, or e-tax.
This year, the e-tax, levied on everyone who lives and/or works in the city, provided $160.7 million, or of the city’s general revenue budget of $484.4 million. That portion just about pays for the combined budgets of the police and fire departments.
In 2010, voters statewide passed a outlawing new earnings taxes. The measure required voters in ºüÀêÊÓƵ and Kansas City, where the tax already existed, to reauthorize the tax every five years. In 2011, Kansas City re-upped its levy with a 78 percent majority vote; in ºüÀêÊÓƵ, the majority was 88 percent.
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On April 5, it will be time to do it again. In the meantime, the Legislature, unimpressed with urban democracy, may take matters into its own hands.
It’s possible the Legislature is just grandstanding. Eliminating the earnings taxes in ºüÀêÊÓƵ, with no provision for replacing lost revenue, would be such a disaster that no responsible lawmaker could take it seriously.
It’s also a mark of the influence wielded by anti-tax crusader Rex Sinquefield, the conservative mega-donor. He paid for the 2010 ballot measure. He has donated to the campaign of Sen. Kurt Schaefer, R-Columbia, who is running for state attorney general. Schaefer is the sponsor of , now aimed solely at the ºüÀêÊÓƵ earnings tax; Kansas City’s political and business communities were proactive and lobbied their city out of his bill.
Schaefer is not the only meddler. Rep. Kirk Mathews, R-Pacific, has filed an that not only would permit ride-sharing companies to operate independently of Metropolitan Taxi Commission oversight, but also exempts the company and its employees from any local taxes whatsoever.
When Uber decided to and plead its case in Jefferson City instead, its lobbyists found easy pickings. Uber and similar companies would get a free ride under this unfair bill. Their drivers would not have to pay earnings taxes. Taxi drivers and bus drivers would.
There’s also a related controversy concerning the city’s a sort of earnings tax levied on city employers. It raises $38 million a year for the city, about 8 percent of general revenue. The constitutionality of the tax, enacted by city voters in 1988, has been challenged in court by General Marine Services, a city-based barge and towboat service company.
General Marine’s lawyer, Bevis Shock of Clayton, questions the constitutionality of the city’s practice of allowing certain companies to keep portions of earnings and payroll taxes in return for keeping jobs.
All special deals given to special pleaders undermine public confidence, but a city struggling to maintain itself sometimes has little choice. Nobody likes paying taxes, but Justice Holmes was right: They are the price we pay for a civilized society.
Income taxes are their fairest form, as long as they’re applied equally to all. Fairness, apparently, must wait for a different day.