Starving the Beast
[ Patrick Tuohey ]I read a Jason Noble story in the KC Star (linked through Tony's Kansas City) that Cole County Commissioner and attorney Marc Ellinger* has been approved to circulate several petitions regarding the earnings tax in St Louis and Kansas City. Specifically, Ellinger would like to remove the authority for cities to charge an earning tax or put the matter up to public vote.
Reactions have been predictable: How can the cities survive if you take away this important source of funding?
My response is that government cannot be streamlined any other way. The beast will not curb its appetite--it must be starved.
During the 2008 light rail campaign, it was widely reported that City Council supporters replied to people who expressed reservations about the project, "we'll find the money." The same can be said of politicians in Washington who manage to "find the money" for pork barrel spending and $100 deals for wary states with wary senators. Ask yourself this: under what circumstances would Kansas City or St Louis ever relinquish the earnings tax?
The effect of cutting the earnings tax is not as simple as just reducing government income by than amount. The St Louis-based Show-Me Institute published a study a few months ago that claimed:
According to our calculations, ending the tax would reverse Saint Louis’ current negative growth rate. If Saint Louis were to eliminate its earnings tax, our projections indicate that during the next 25 years, the cumulative discounted income gains would be $1.5 billion. If Kansas City were to do the same, its cumulative discounted income increase would be even more substantial, totaling $3.2 billion additional dollars in additional personal income for the next generation.
Imagine, dear readers, a reason for business to stay in Kansas City and not leap at every opportunity into Johnson and Wyandotte Counties!
No,
voters cannot count on City Halls to streamline themselves. We must
simply cut taxes and instruct politicians to "find the money" themselves.
(*Full disclosure: Marc Ellinger is the attorney for Missourians for Responsible Government which publishes The Missouri Record.)
EDITED TO ADD: A more informative story on the initiatives comes from Jake Wagman at the Post-Dispatch.
12/29/2009 3:19:59 PM
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