Local

A little truth on taxes

Dave Helling
Dave Helling

Two businesspeople sued last week to stop collection of the taxes needed to build the new downtown streetcar line.

The plaintiffs — who own property in the streetcar district — claim they were unconstitutionally prevented from voting on taxes they’ll have to pay. Only district residents, not property owners, were allowed to cast ballots last year.

An aberration? No. As Tom Jones once sang, “It’s not unusual.”

Obviously the courts will have to sort out the legality of the specific streetcar plan.

But a ruling that says anyone who pays a tax gets to vote on it first would not only break with tradition, it would terrify city leaders for reasons that go far beyond downtown transit.

To be clear, such a decision seems pretty unlikely. Taxation without representation is actually pretty common in America and not easily dislodged by a scrap over a streetcar.

The federal government, for example, ran for decades on import duties paid by foreign merchants. Today, cities, counties and states routinely collect sales and property taxes from non-residents who have no say in local elections.

Missouri collects taxes from non-resident entertainers and athletes.

Kansas Citians have approved hotel taxes that outsiders pay, and car rental taxes helped build the Sprint Center. If you own property but don’t live in the city, you don’t get to vote on the tax renewal for indigent health care — but you’ll pay if it passes.

Of course, the granddaddy of all outsider taxes is Kansas City’s earnings tax, the 1 percent levy on income paid by anyone who lives or works inside the city limits and on business profits. The tax provided the city with more than $200 million last year.

It was first approved decades ago, but it now faces a renewal vote every five years — ballots cast only by Kansas Citians.

Those voters easily backed extension of the earnings tax in 2011, and city leaders firmly believe they’ll do so again in 2016.

But no tax is a sure thing.

If plans to raise the sales tax for transit are approved and property taxes inch up, Kansas City voters may take a look at giving themselves a tax cut.

So imagine the possibilities if some judge unexpectedly says

everyone

who pays the earnings tax should be allowed to vote on it, including taxpayers who work in the city but live outside it.

That could turn the city’s financial uncertainty into outright panic.

Again, that seems highly unlikely. America’s rich tradition of taxing someone else seems relatively safe.

There may be more at stake in last week’s lawsuit, though, than just streetcars.

  Comments