Earnings Tax

[kard]

What I'm saying is that if the tax system change was made tomorrow and the city starts making more money--tomorrow--then the tax rate just went up.

[bahua]

If the city is making more revenue then that means its residents are being taxed more, right?

In other words, taxes are being increased, right?

No. Taxes don't have to be any higher for more money to be collected by city hall. The additional moneys are created by new business and residents, which is further compounded by increased density.

What I'm saying is that if the tax system change was made tomorrow and the city starts making more money--tomorrow--then the tax rate just went up.

What I advocate at its core, is not Haslag's plan. I see no reason for the land tax to be any higher than a comparable property tax. However the rate is set, the city will eventually be swimming in money.

[kard]

No. Taxes don't have to be any higher for more money to be collected by city hall. The additional moneys are created by new business and residents, which is further compounded by increased density.

So you're talking over time.  I took what you said earlier to mean immediately after the change.

[bahua]

I took what you said earlier to mean immediately after the change.

Certainly not. Nothing in economics works instantaneously. Sorry for the misunderstanding.

[staubio]

To piggyback on our brief discussion on Monday, what do we make of the CostCo question?  The market isn't going to be able to provide a low cost alternative to that.  Will people just start driving to Wal-Mart in the suburbs?  Will the space be used by more productive business?

[mean]

They would sooner or later have to minimize the amount of land they were taking up. Exactly how they did that would be up to them, but they wouldn't have to just shut down. They might prefer shutting down over making dramatic (and expensive) changes to their building, though.

[bahua]

If the tax structure doesn't allow Costco to stay open to fulfill the demands of the market, someone else will seize that market with a business plan that works.

Bear in mind too that in an economy of increasing density, the demographic changes to people of greater wealth.

[KCMax]

Klein takes on earnings tax

  Mayoral hopeful Henry Klein wants to do something about it. He proposes trying to gradually reduce part of the tax.

  "Ultimately, my goal is to eliminate the earnings tax altogether," Klein said in a statement.

  This marks a different stance for a KC mayoral candidate. In the race so far, candidates have steered clear of the issue, even though a Missouri think tank recently advocated eliminating the tax. This was brought up at one mayoral forum, but several candidates noted the earnings tax is the city government's largest source of revenue. Becky Nace has pushed for eliminating the tax for members of the military. But Albert Riederer summed up the stance of most candidates: "The e-tax is here, and it does work," he said.

  Klein wants to take the first step toward getting rid of the earnings tax by giving small businesses a break. He has studied the issue enough to know that both individuals and businesses pay the tax, with businesses generating a sliver of the total revenue. Klein wants to cut off the bottom 10 percent of that business tax revenue, amounting to an estimated $3 million.

  He believes that tax break will end up resulting in more job creation and business growth, which he maintains would generate more revenue for the city in other ways (a little supply-side economics), while also giving those businesses a little boost to stay afloat and contribute more earnings tax down the road.

  Klein says if he's elected, he will create a task force to further study the earnings tax.

[GRID]

I think it's a great idea to eliminate the Etax, one of the only real ways to get more of the region to help pay for KCMO infrastructure. We really need to raise the hell out of other taxes, including property taxes, to make up for it.  Seems to work in KCK, no etax, but super high property taxes and best of all, all those JoCo people that seem to have the biggest beef with the KC Etax will move to KCMO in droves, they will fall all over themselves for jobs in KCMO because the Etax is gone...

Can we attack serious issues that are even possible rather than screw around with KCMO's single largest revenue source because it's the "popular" thing to do with with the public and will get you elected?

The last thing KCMO needs right now is a massive reduction in revenue flow with literally billions of dollars of backlog infrastructure repairs needed, especially when the city is by far the fastest growing city in the region now in both residential and commercial construction.  All that growth in the nortland and downtown seems to be doing ok with the Etax and since every other car in my crown center parking garage has JO plates, I like the idea they they pay too along with KCMO residents.

[Maitre D]

But why should I pay an "earnings tax" in KCMO, when I didn't have to in JoCo?

It's total bullspit.

There's no more sprawl - or infrastructure need  - in KCMO than there is in JoCo.  Education isn't funded any less.  So where is my money going to, exactly?  Fireman's vacation days?   

[GRID]

Because KCMO maintains an infrastructure for a city 4 times its size, as most urban cities do.  Let's see, add a lane to Nall in each direction, that's about as complicated as it gets in JoCo.  I have a hard time believing that you don't know the difference between the revenue needs of KCMO vs JoCo.

[Maitre D]

Because KCMO maintains an infrastructure for a city 4 times its size, as most urban cities do.  Let's see, add a lane to Nall in each direction, that's about as complicated as it gets in JoCo.  I have a hard time believing that you don't know the difference between the revenue needs of KCMO vs JoCo.

No.  Teach me, wise one.

If there is such a wide expanse of space per capita, in KCMO, that's their own stupidity.  Why would they allow that to begin with? 

But let's agree on this:  cutting infrastructure could prove beneficial.  It'll concentrate resources.  If you live SE of 85 & Troost, sorry:  no more salt on the roads in winter.  That type of thing.

[lock+load]

But why should I pay an "earnings tax" in KCMO, when I didn't have to in JoCo?

While we're at it, why do I have to pay state income taxes in MO or KS when I could be paying zero in Texas?  Every jurisdiction is different.

[KC0KEK]

I was surprised to read in the Star the other day that KCMO and JoCo have roughly the same number of miles of water lines. Of course, KCMO's system is more expensive to maintain because it's much older, except maybe in a few parts of Olathe, which is roughly the same age as KCMO.

[GRID]

I was surprised to read in the Star the other day that KCMO and JoCo have roughly the same number of miles of water lines. Of course, KCMO's system is more expensive to maintain because it's much older, except maybe in a few parts of Olathe, which is roughly the same age as KCMO.

wow, somebody is actually thinking about this a little.  Any more thoughts???  You are on the right track!

[aknowledgeableperson]

Funny thing about taxes.  In reality no tax imposed is popular.  So the government should not do away with this tax because it is not a popular one.

Taxes are imposed to provide funds for government operations.  A side effect of taxes is social policy (high taxes on booze, gambling, etc) and economic incentives or disincentives.

Do people choose not to live in KCMO solely because of the E Tax?  I don't think so.  Do businesses leave or not come to KCMO solely because of the E Tax?  I don't think so.  This tax may fall into the negative column when people/businesses look at good points and bad points but I don't think this tax is a "deal breaker".

The city could do away with this tax but what would take its place? 

[DaveKCMO]

Funny thing about taxes.  In reality no tax imposed is popular.  So the government should not do away with this tax because it is not a popular one.

Taxes are imposed to provide funds for government operations.  A side effect of taxes is social policy (high taxes on booze, gambling, etc) and economic incentives or disincentives.

Do people choose not to live in KCMO solely because of the E Tax?  I don't think so.  Do businesses leave or not come to KCMO solely because of the E Tax?  I don't think so.  This tax may fall into the negative column when people/businesses look at good points and bad points but I don't think this tax is a "deal breaker".

The city could do away with this tax but what would take its place? 

good points, AKP. i dislike the e-tax and many use it as an excuse, but if neighborhoods weren't crumbling and schools had a good rep, people wouldn't make such a big deal about it. in the long haul, i think it makes sense to reduce and eliminate it, but not until the city grows and can replace the revenue stream.

[nota]

but not until the city grows and can replace the revenue stream.

It doesn't seem the city is interested in revenue stream since they give it as fast as it comes in via TIF

[Maitre D]

Funny thing about taxes.  In reality no tax imposed is popular.  So the government should not do away with this tax because it is not a popular one.

Taxes are imposed to provide funds for government operations.  A side effect of taxes is social policy (high taxes on booze, gambling, etc) and economic incentives or disincentives.

Do people choose not to live in KCMO solely because of the E Tax?  I don't think so.  Do businesses leave or not come to KCMO solely because of the E Tax?  I don't think so.  This tax may fall into the negative column when people/businesses look at good points and bad points but I don't think this tax is a "deal breaker".

The city could do away with this tax but what would take its place? 

Agreed on all points.

But you still don't address why they charge the 1%, but JoCo doesn't.  I dont' get a SINGLE THING from paying this tax, I just don't.  And if you say, "Well KCMO needs it more", then that is just begging the question of WHY that is....

[kard]

Agreed on all points.

But you still don't address why they charge the 1%, but JoCo doesn't.  I dont' get a SINGLE THING from paying this tax, I just don't.  And if you say, "Well KCMO needs it more", then that is just begging the question of WHY that is....

Cool.  Since I live in Missouri and work in Kansas, can I get my Kansas income taxes refunded?