Earnings Tax

[kard]

The earnings tax is mandatory if you work in the city. Forced.

You can choose both where and IF you wish to buy something. Voluntary.

Why can't I choose to work somewhere that doesn't have an e-tax?  Last time I checked I'm free to quit my job and get another one, same as I can shop somewhere else.  There's a bit more involved with finding a new job but one is still free to do it.

[lock+load]

The earnings tax is mandatory if you work in the city. Forced.

You can choose both where and IF you wish to buy something. Voluntary.

You can also choose where and IF you wish to work.  I fail to see the difference.

[KC0KEK]

that's why it's called social security, versus something else like an individual retirement account. can't we care for everyone instead of just ourselves?

Society is a group of ourselves. SS provides no guarantees to an individual or a group of individuals. Semantics aside, SS is a rip-off.

A better question is, why don't more of us care for ourselves instead of expecting everyone else to shoulder the burden?

[DaveKCMO]

A better question is, why don't more of us care for ourselves instead of expecting everyone else to shoulder the burden?

indeed, but probably better for a thread about social security than the e-tax. 

[shinatoo]

The earnings tax is mandatory if you work in the city. Forced.

You can choose both where and IF you wish to buy something. Voluntary.

OK, make that choice. Have fun not eating, or putting clothing on, or medicating yourself.

[Maitre D]

Society is a group of ourselves. SS provides no guarantees to an individual or a group of individuals. Semantics aside, SS is a rip-off.

A better question is, why don't more of us care for ourselves instead of expecting everyone else to shoulder the burden?

Great take.

[Highlander]

Why can't I choose to work somewhere that doesn't have an e-tax?  Last time I checked I'm free to quit my job and get another one, same as I can shop somewhere else.  There's a bit more involved with finding a new job but one is still free to do it.

Everyone is of course free to do this but how many people quit their jobs and go elsewhere for a 1% difference in salary?  In my experience, any salary increase has to be substantial to entice professionals to change jobs, most people change companies for reasons other than salary.  I just do not see the 1% tax as that big of a deal.  If you make 50,000, you are out 500$ which you get a portion back as a refund on federal tax....so it's not even 1% effectively, it's more like 0.075%.     

[bahua]

If Gore's lockbox technique was used, SS would have more money that it could ever possibly need, and it could provide an actual valuable service.

As it is, it's a government entitlement, poured into almost anything but social security, to the detriment of our society.

[shinatoo]

If Gore's lockbox technique was used, SS would have more money that it could ever possibly need, and it could provide an actual valuable service.

As it is, it's a government entitlement, poured into almost anything but social security, to the detriment of our society.

Sammy Haggars "Three Lock Box" would have been even better.

[bahua]

I used to think that song was called, "Beat-up Box."

[Maitre D]

I just do not see the 1% tax as that big of a deal. 

You're not paying it.

[Highlander]

You're not paying it.

You're right.  But, if I were, it would mean I was gainfully employed and living in KC and I would gladly pay the tax for that privilige. 

[KCPowercat]

ok, to dig this back up, I'm helping a friend deal with this first hand.

This friend has a quickly growing business and is looking for their first office.  They would like to move to KCMO and not be stuck in the suburban office parks.....the problem is becoming they live in KS.  So to move to KCMO, they take a direct 1% cut in personal and business profits.

In the past, I've never found this to be a big deal because overall, I think the taxes balance out (state + county + local taxes)...but if a person maintains residence in KS like this person wants to, to move their company to KCMO is not going to happen...they aren't simply going to hand over 1% for the "privilege" of being in KCMO.

How does KCMO expect to draw businesses, especially small, up and coming businesses that see this 1% as cost prohibitive.  Does anybody have insight on what they may be missing?  They've spoken with their tax people and this appears to be the case.

If this is the case, KCMO needs to find a way to get rid of this 1% tax somehow.  Pulling in new business has to be a biatch.

They've also been in contact with the EDC about this subject...who I'm proud to say, have been very willing to help them out.

[KCTigerFan]

Over the last six years I have been in a position to assist two companies that I have worked for in their relocation process.  Both are advertising agencies.  Both were already based in KCMO.  Both had owners that live in KS.  The key in the process is not the 1% earnings tax, though it does play a role.  In evaluating the relocation/expansion it was the entire package that ruled the day...
1.  Lease rates of locations
2.  Finish costs
3. Parking options/costs
4.  Overall tax package
5.  Access/exposure/signage
6.  Access to airport/clients/employees
7.  Coolness factor

With us, the 1% earnings tax was easily offset by evaluating the total tax burdeon.  The parking and overall lease rates were lower on many KS sites.  In both scenarios we chose to stay in KCMO because of the ability to attract and retain cool employees and "wow" clients when they visit.

In short, I think the Earnings Tax can anddoes play a role but in the big picture it is not a deal breaker for most companies. 

 

[lock+load]

Move to MO and take advantage of the 0.45% lower state income tax rate.  That will lessen the total tax impact. 

So basically, he wants to move his business to KCMO and take advantage of what the city has to offer, but not pay for it?  Someone has to pay for it.  Where should the tax burden be shifted to if the e-tax is eliminated?

[bahua]

How does KCMO expect to draw businesses, especially small, up and coming businesses that see this 1% as cost prohibitive.

Ideally, operating in the city should be extremely lucrative, so that the additional business would offset any exorbitant taxation.

We have systems in place that keep that from being the case, but I digress...

[KCTigerFan]

I simply don't see that KCMO imposes "exorbitant" taxation. 

Could some fees be streamlined or more clear?  Yes.  Could the red tape and bureaucracy be washed out?  Yes.  Hopefully that is what the Funk will work on.  In my dealing with the city is wasn't the cost of dealing with them but the pain in the ass red tape.

But overall the tax burdon on KCMO residents and businesses is simply not outrageous. 

[KCPowercat]

Move to MO and take advantage of the 0.45% lower state income tax rate.  That will lessen the total tax impact. 

So basically, he wants to move his business to KCMO and take advantage of what the city has to offer, but not pay for it?  Someone has to pay for it.  Where should the tax burden be shifted to if the e-tax is eliminated?

To him, the city doesn't offer anything additional except location. 

I used to be in the "1% isn't a big deal" camp but seeing a company relocating first hand, I see how it's an issue to bring companies into KCMO...especially now when many service companies don't have a "front door" that location of their business is a big deal.  You can plop down some servers and phone people anywhere....

[GRID]

But overall the tax burdon on KCMO residents and businesses is simply not outrageous. 

It would be if they removed the E tax though.  People don't seem to get that.  Right now the Etax takes "some" of the burdon off KCMO residents because so many people live outside the city, yet work or have a business there.  The Northland is the fastest growing part of the metro.  Every one of those residents pay the Etax wether they work in the city of KCMO or not.  The Etax has little impact on growth.  It's just another anti KCMO excuse if you ask me.

You get rid of the Etax and KCMO is in deep shit.  Something has to give when you take away the city's largest source of revenue.

I have paid the Etax all my life.  I say get over it.  Overall, taxes are still lower in KCMO than in most suburbs, yet those taxes are used for so much more than schools, and public safety.

Then you have to look at the desire to want to live or work in the "city".  I live in the burbs.  It would take one hell of a pay raise for me to take a job in Overland Park or Tiffany Springs just because I can't live AND work in the suburbs.  I might consider Lee's Summit just because it's close, but I could see myself driving downtown after work twice a week just to feed that need .

I know everybody is not like that and that's fine, but the Etax thing is blown way out of proportion.

I'm considering opening a store downtown myself.  The Etax is the last thing that would make or break the idea.

[kard]

Shouldn't an accountant be able to run different scenarios for where the office is located?  There has to be other tax / financial factors when comparing a location then just KCMO's e-tax.