None of us like to pay taxes. For the last several decades those of us who live and/or work in the City of St. Louis have been required to forfeit an additional 1% of our federally-declared income to City Government. In April 2011 this may change, thanks to the passage of a ballot initiative last year, which made such earnings taxes illegal in the State of Missouri and requires those few places where they do exist to place their continuance on the ballot every five years.
What are the chances of St Louis voters deciding to continue this tax in the current economic climate? What would be the effect of the earnings tax being eliminated? The Mayor and an increasing number of Aldermen are saying “Disastrous!” and are raising money to fund a campaign against the elimination of the earnings tax.
The earnings tax forms a significant part of the City budget and its elimination would necessitate both the need to identify alternative taxes and to implement cuts. Those supporting the elimination of the earnings tax argue that both would be a good thing, City Hall is undoubtedly an inefficient and wasteful place but who’s to say that the elimination of this source of revenue would lead to the most appropriate cuts and increases in efficiency? Favorite among alternative taxes appear to be those on property, but increases in property taxes would further stagnate a hesitant recovery in development and improvement. Increases in sales taxes would simply drive shoppers to very close by and viable alternatives in the County. Cuts would allegedly be deep and substantial, possibly compromising the safety of citizens and reducing to a minimum many services currently regarded as essential.
Which way to vote? In favor to continue the status quo and hope that other mechanisms will lead to increases inefficiency and the elimination of waste at City Hall or against for the short-term savings in tax expenditure and the risk of kicking-off a decline equal to white flight in the ‘60’s?