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04.30.2008 5:18 pm

Eliminating the city earnings tax: Pipe dream or sound goal?

St. Louis Post-Dispatch

I did my taxes a few months ago, in which I get my annual reminder about the city earnings tax. The 1 percent tax has been a thorn in the side of the business community, some members of whom have long complained that the tax is one of the obstacles to new business and industry locating in the city of St. Louis.

Our story today says, “Missouri Treasurer Sarah Steelman wants to lead an effort to get rid of the earnings tax that brings about $140 million a year to the city of St. Louis’s budget.”

Steelman proposes passing statewide legislation that would take back the authority the state gave to cities in 1947 to levy a tax of up to 1 percent on income of individuals and businesses. The only two cities with the tax are Kansas City and St. Louis.

…Mayor Francis Slay has also expressed support for getting rid of the earnings tax, as long as the revenue can be replaced.

Steelman has no solution for that. She said if elected governor she’ll push for a five-year repeal of the tax. “I would work with local officials to find a replacement tax, or replacement revenue to replace the earnings tax.”

Is this an election year promise or a real proposal that should be pursued?

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Say it ain’t so Joe. A proposal to eliminate the antiquated Earnings Tax? And the mayor agrees with this? OMG I think I’m gonna cry. Nuts to a 5 year repeal, get rid of the thing permanently. I’ll vote for anyone who can get this passed. If I have to be taxed, I’ll go for the land tax. My little postage stamp will be pennies compared to tens of thousands we’ve paid over the years to that stupid tax. While someone’s looking at making changes, get rid of the 92 municipalities and finally merge the city and county.

Looking back, what has the Earnings Tax really bought me? Not much. The streets are crappy, we went from street sweeping every other week to once a month, we’ve been promised a new alley for 4 years now - still nothing.

Here’s a question? How do other cites in the state get their money? They don’t have an Earnings Tax

Best line from the story:

“State lawmakers first approved the idea of an earnings tax in 1947 as a result of declining urban tax bases when city residents started leaving to the suburbs. St. Louis adopted its tax in the late 1950s”

And they, residents and businesses, have continued to leave since then. I wonder if there is a connection?

— AJ
9:40 pm April 30th, 2008

no matter what tax it is, I am always in favor of elimination of taxes. well, especially stupid ones.

— larry
10:32 pm April 30th, 2008

I am a resident of St. Charles, but I had to pay the city earnings tax for 4 years when I worked in the city. Yet I couldn’t vote on how that money was to be used or who was using it. Isn’t that one of the reasons they fought the Revolutionary War “No taxation without representation”?

— Greg
12:00 am May 1st, 2008

I’m also a resident of the City of St. Charles are whole heartedly agreement with the above statement. Our company moved it’s offices from the county to the city and I feel it’s an unfair tax since I’m not benefiting from it at all.

— Mare
5:43 am May 1st, 2008

I paid the city earnings tax for 23 years and while nobody goes “WHOO HOO! MORE TAXES!” I just kind of blew it off. Actually, if you work in the city, you do benefit from the taxes at least in theory. Unless you come to work in your private helicopter, you use the streets and benefit from any street improvements or snow removal. (Yeah I know I’m pushing the envelope here, but it was an argument I blasted St Louis City Hall for when snow removal was being neglected on a major business avenue. I got a snotty answer. Go figure.) And you also get whatever police and emergency assistance is available should something occur at your place of business. Still, other urban areas seem to get along quite well without an earnings tax so make it begone!!!

— Pat Carpenter
7:15 am May 1st, 2008

a little of this may get off subject, but I am venting. the city forces people & businesses out. I won’t even touch on the waste.. beyond the scope of a blog that is for sure.

You know, the city of st louis is the most pathetic government to deal with. that is why I moved out and moved my business out of the city.

One thing the voters need to be aware of,

1) two years ago or 3, the voters approved the ‘business license fee’ I guess they didn’t understand that even home based businesses must pay this fee, which now starts at $250 a year, and for what?? NOTHING.. the city does ABSOLUTELY nothing for this fee.

2) the 1% is on your gross income after retirement deductions, years ago they tried to include the amount before retirement deductions but Ralston among others threatened to pull out of the city, if I recall this correctly.

3) Employers pay an additional .5% bet most people do not know this, so really the tax is 1.5%

Then deal with the city and their mistakes, oh my god… I went for years receiving ‘returns not filed’ notices and their little threat of civil suit crap, AFTER I had moved out in 2005!! My CPA filed the final return, but some idiot I guess couldn’t read down at city hall.

The Cities Sales tax rate is also a bane to growth, I won’t shop in the city, unless it is totally necessary.

Property taxes last year were another one, mine tripled in one year. I still own a house in the city which we have done n othing to in many, many years, but they raped us on the taxes
‘all of a sudden’

— markE
7:26 am May 1st, 2008

I forgot to include this, check out http://www.fairtax.org This is what is needed in place of taxes on income, which is unfair at best.

— markE
7:27 am May 1st, 2008

And while we are at it, let’s eliminate the state personal income tax, as they did in Texas, which is the reason AT&T moved its corporate headquarters there. If the City earnings tax is causing businesses to leave the city, then the state income tax is causing businesses to leave the state.

— Tony Sestric
7:48 am May 1st, 2008

While I admit I don’t pay earnings tax, I soon will because I’m hoping eventually to move to the city.

When you look at the amount of the tax, it’s really not a lot of money: 1% of a worker’s earnings, so the average person pays from $400.00 to $750.00 per year!

If the tax is repealed, how will the City offset the loss? Higher sales taxes? Increased restaurant /hotel “luxury” taxes? Increased taxes on in-city cab fares? I wonder how this might affect the downtown tourist industry?

Before we fix it, let’s look at the whole picture.

— Ryan On The Euphonium
7:48 am May 1st, 2008

I’m with Pat and Ryan/E on this one. I don’t miss the 1% I pay to the city where I live and work. Like they say, the only things certain in life are death and taxes. I’d rather live and work in a place with streetscapes and sidewalks than endless seas of parking anyway.

Now, if someone were to propose a 1% cut in governmental bureaucracy waste, I would be all for it (and don’t tell me it’s not there). More money for streetscapes and sidewalks! Maybe we could get those old city schools repainted and tuckpointed too.

On the other hand, the recent rise in sales tax to pay salaries is just ridiculous. It’s not that far to drive over the county line to shop at better venues…

— Ryan A
8:08 am May 1st, 2008

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