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Editorial: Payroll tax

Monday, June 25, 2007

An exchange of information with leaders in Paducah, Ky., has led Cape Girardeau officials to begin exploring whether a payroll tax would benefit the city. Paducah relies heavily on a 2 percent payroll tax for revenue. The tax accounts for 43 percent of that city's revenue. In Kentucky, the state imposes a 6 percent sales tax. Local communities in Kentucky have no sales taxes.

Cape Girardeau has no payroll tax, but its one-cent sales tax generates 44 percent of the city's revenue. That worries some city leaders, who fear an economic downturn could weaken Cape Girardeau's financial situation. We would suggest that an economic downturn almost certainly would affect revenue from a payroll tax as well.

Under Missouri law, levying a payroll tax is limited to cities with populations over 300,000. Only St. Louis and Kansas City have a payroll tax, so in order for Cape Girardeau to levy a payroll tax state law would have to be amended. Voters in the city also would have to approve.

The benefit of a payroll tax, say supporters, is that part of the money is paid by people who commute into Cape Girardeau for work but don't live in the city. The rationale is that they use city services as well.

Sales taxes, property taxes and payroll taxes are the only significant options for raising revenue. Cape Girardeau has maintained a relatively low property tax rate, and city leaders seem loathe to place more of a burden on property owners.

The Show-Me Institute, a not-for-profit organization that promotes free markets and individual liberty in the state's public policy, last year released a study by University of Missouri professor Joseph Haslag that maintains the St. Louis payroll tax has caused job creation within the city to stagnate. He claims the tax, also called an earnings tax, drives both businesses and workers into the county.

The Show-Me Institute recommends replacing St. Louis' earnings tax with a two-tiered property tax that would set one rate for land and another for structures on the land.

Talk of a payroll tax comes at a time when the Parks and Recreation Board is recommending the city place a half-cent sales tax on the November ballot to fund $36.9 million in storm-water and parks projects. Some in leadership positions in the city think this tax for these projects is going to be difficult to sell to voters without a sunset clause. The case for a payroll tax is even further from being made.


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I say bring on the VOTE, Every one I know is going to vote "NO" for any kind of tax increase along with voting for a new MAYOR, COUNCLE MEMBERS & other ELECTED OFFICIALS.

Many of us are tired of the City continually wanting more of our money, The citizens & business owners of Cape just keep giving and giving.

They want your money but you can't put a sign/banner in front of your business to attract new customers in the hopes of generating more income! "What a Joke"

-- Posted by Luvthatdirt on Mon, Jun 25, 2007, at 5:08 AM

I agree, let's see that VOTE. I have to say, Cape's city leaders are trying to squeeze money from anyone and everyone. Have they not heard that the economy is the worst it has been in years? They need to do like the rest of the population of Missouri, and learn how to spend less. Citizens don't have the right to tax to increase our pocketbooks, and they should not be able to tax to fix every problem. I have to agree with the findings from Mr. Hasling, an earnings tax will cause those of us who work in Cape to find jobs elsewhere, or move from Southeast Missouri all together. If city leaders would like to lose a significant part of its workforce, I say Bring It On.

-- Posted by cabat on Mon, Jun 25, 2007, at 7:33 AM

Wait a second, Kentucky's sales tax is only 6% while Cape's is 7.5? Looks my big ticket shopping will take place over there.

-- Posted by quiksand on Mon, Jun 25, 2007, at 8:07 AM

I am all for putting this up for a vote. But let's put it up when we have a real election. Maybe this could be on the ballot next time we vote for a new council, or a new mayor.

I could care less, I am sure that the folks in Jackson, and Scott City are already planning how to attract the businesses that will leave Cape.

-- Posted by interesting on Mon, Jun 25, 2007, at 11:58 AM

I drive 30 miles one way to Cape to work 5 days a week, from a neighboring community. I pay approximately $7.00 a day in gasoline to make the trip to work. While in Cape I often buy groceries, purchase gas, stop for supper, or enjoy walking at the Mall. I do not believe that the City of Cape Girardeau needs to collect 2 % of my salary unless it is willing to do 2% of the work I am being paid to do. I think that I contribute to Cape through my purchases, and that I provide a valuable service to the community of Cape through my work. I am paying sales tax (at a higher rate than in the community where I live). I am not receiving the benefits of a person who lives in Cape and do not feel it is my responsibility to pay for those services, more than I already do. I am already paying property and real estate tax where I live. If there is to be a vote, then also folks who commute to Cape for jobs should be allowed to vote, as they are the ones who will be taxed also. What happened to "No taxation without representation."?

-- Posted by lady63775 on Tue, Jun 26, 2007, at 5:01 AM

It is easy for you guys to sit at your computer and type in gripes as to why you dont wont a 1/2 rise in sales tax nor a city earnings tax. Well, the time to show the council you dont want these taxes is to get your lazy butts out and vote if your elgible to do so. The tax increase for the library won by 132 votes with only 2500 people voting (about 16% of registered voters), so dont complain if you dont vote.

-- Posted by gibsongirl on Tue, Jun 26, 2007, at 1:42 PM

I am currently considering taking a job to practice medicine in Cape. If they decide to institute a 2% tax, I will have to think seriously before taking the position.

I have a lot of communities contacting me about positions in their towns without this tax. Why should I pay an extra couple of thousands of dollars a year for the privilege of working in Cape?

-- Posted by italiaroma on Tue, Jun 26, 2007, at 7:37 PM


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