Earnings Tax

What The Mayor Thinks:

It is a rare town hall meeting that someone doesn’t complain about the city’s earning tax (e-tax), calling it an unfair tax that discourages businesses from moving here, or saying that it penalizes them for living in Kansas City rather than in one of KC’s suburbs. The fact is, however, that the e-tax is our largest single source of revenue, and 50 percent of it comes from people who don’t live in Kansas City. It is one of the few ways we have of getting people who live in the surrounding suburbs to share in the cost of our government, and the amenities that it provides them, such as our museums.
The November earnings tax election will allow Missourians who do not live in Kansas City to tell us how to finance our government. That should be our decision alone. No one from the outside should dictate how Kansas City runs our government.
Further, if the November ballot issue is approved statewide, Kansas City voters will be asked in April to reaffirm the earnings tax. If the earnings tax is reaffirmed, Kansas City voters will be required to return to the polls every five years to reaffirm the earnings tax again and again. Concern in the financial markets about such an onerous cloud over the city’s chief source of revenue will destroy Kansas City’s credit rating.

What The Mayor Has Done:

Since St. Louis billionaire Rex Sinquefeld first started pushing for a statewide vote on municipal earnings taxes, I have spoken at length with economists, studied the numbers, spoken with labor leaders and business executives and listened to city residents at town halls. After careful thought and consultation, I voiced support for the earnings tax, and announced my opposition to SInquefeld’s proposal.

What The Mayor Plans to Do:

Having said that, though, the e-tax is under fire for some valid reasons. We absolutely need to look at long-term comprehensive tax reform to modernize the way Kansas City receives revenue. Talking about taxes is never popular for the average politician, but that is where I’m different.
I welcome an attempt to make sure our tax structure still makes sense, and I welcome those who have ways to change it to chime in.
What I can’t welcome is a push by out-of-town interests and voters who don’t live in Kansas City to tell us what to do.