Let voters decide

Friday, October 29, 2010

In its Oct. 26 editorial opposing Proposition A, the Southeast Missourian said, "This proposition is basically aimed at St. Louis and Kansas City." The Let Voters Decide campaign respectfully submits that Prop A is crucial to all residents of the state, including those in Southeast Missouri.

If Prop A passes, state and local politicians will be prohibited from imposing an earnings tax anywhere outside of Kansas City and St. Louis, which already have earnings taxes. Local earnings taxes have been considered in St. Joseph, Springfield, Columbia, Jefferson City and other Missouri communities. And the Missouri Municipal League, the organization of top city officials from across the state, dislikes Prop A. But there's little wonder that self-interested bureaucrats and public employee unions would want to protect a taxation option.

There is growing recognition that a local earnings tax -- which is imposed on personal incomes and business profits -- on top of state and federal income taxes is unfair to working people and hurts local economies by pushing businesses to locate in cities or towns that do not have the tax.

As long as the earnings tax remains an option for any municipality, this third layer of income tax remains a tempting and potentially destructive threat for Missouri municipal taxpayers.

There's a pretty basic reason for having all voters in the state handle this issue. Earnings taxes are authorized under state statute. Therefore, a change in state law is the only way to make sure a local earnings tax doesn't gain traction.

In addition, existing state law provides no sunset provision on the earnings taxes already in place in St. Louis and Kansas City. Prop A would let voters in St. Louis and Kansas City decide every five years whether they want to keep the earnings tax or phase them out gradually over 10 years.

We believe removing the earnings tax would help attract new businesses and people to St. Louis and Kansas City. Getting those cities growing again would boost their local economies. That would generate more local property and sales taxes while reducing the tax burden on local working families and business owners.

Marc Ellinger is a Jefferson City lawyer and spokesman for the Let Voters Decide Initiative.

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