Where do the mayoral candidates stand on phasing out the earnings tax?


None of the mayoral candidates has offered specifics about innovations to draw population and businesses back to St. Louis.

The city’s mayoral contest is heating up with Aldermanic President Lewis Reed, Treasurer Tishaura Jones and Alderman Antonio French battling to close the gap between themselves and Alderman Lyda Krewson before Tuesday’s Democratic primary.

The most recent poll by Remington Research Group and The Missouri Times showed Krewson with a sizeable lead, with 33 percent support among likely Democratic voters. The poll was released two weeks ago — an eternity in politics — and has a 3.2 percentage-point margin of error. Much might have changed since then as major candidates have flooded the airwaves with commercials. Reed had 17 percent and French 15 percent. Jones’s support came in at 13 percent with around 16 percent of voters undecided.

One way the candidates could further distinguish themselves from one another would be to weigh in on eliminating the St. Louis city earnings tax.

Milton Friedman once said, “The more you tax of something the less of it you will get.” This has been demonstrated time and time again, with soda taxes, cigarette taxes, tanning bed taxes, etc. Taxation limits growth. At this point in the mayoral race, why haven’t any of the candidates broached phasing out the earnings tax? Cities that utilize property taxes as their primary mode of revenue fare better than St. Louis and Kansas City do in population growth, housing values and business retention.

St. Louis city has fallen out of America’s top 20 in population, ranking at 18 in 1970 falling to number 57 in the most recent census update. What is driving this marked population loss? Crime? Perhaps, we are for the third year in a row the murder capital (per capita) of the United States. Yet, plenty of cities have significant rates of crime and still retain major corporations and sustain population growth.

The recently reaccredited St. Louis city school system has the lowest academic achievement out of the metro area school districts. With St. Louis Public Schools’ opposition to the competition of charter schools, it’s unlikely that families with children will flock to the city in large numbers, especially if they succeed in their effort to revoke charter school funding.

These factors, coupled with the city leadership’s reluctance to explore ending the earnings tax, combine to form a pretty bleak outlook. In order to see a rapid turnaround such as one achieved in Dallas, we need innovators in city leadership who are willing to take a more centrist approach instead of clinging to ideas and policies that have brought the city to it’s current condition.

At this weekend’s Show Me Politics Mayoral Debate, I will ask each of the St. Louis city mayoral candidates about eliminating the earnings tax, which studies suggest is impeding growth in St. Louis and Kansas City. The Show Me Institute’s Howard Wall, who did one such study, said, “I estimated that the earnings tax was responsible for about one-fourth of the population loss that Saint Louis experienced between 1990 and 2000, and for about one-third of the city’s decrease in employment.”

This is at least worth debating. Reversing a tax that appears to contribute to population and job losses should be an imperative for voters.

While we’re on the subject, mayoral candidates should also debate phasing out the income tax over a 12-year period, which would place Missouri in the rarefied position of being a corporation and population magnet like Tennessee and Texas. The candidates are open to argue against it, using any data and statistics that prove tax-elimination proponents to be wrong. But are they afraid of having the discussion?

In 2010, voters approved a ballot measure that phased out any new earnings taxes and added a requirement that existing earnings taxes be re-approved through a vote every 5 years. That voters mandated this step tolls the warning bell on using the earnings tax as a primary means of funding St. Louis City’s operations.

The way forward is complex, and there is no single prescription for what ails St. Louis. But a serious consideration should be given to measures that have brought growth and prosperity to other major cities. We have a duty at this point, as we pivot to new leadership, to weigh candidates’ positions on taxation. Doing so provides an opportunity for directional shift that is sorely needed to reverse the population and business losses that plague St. Louis.

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stacyontheright

stacyontheright

Host of the nationally syndicated Stacy on the Right Show on American Family Radio.

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