We now interrupt one of the most entertaining presidential elections in modern history to bring you a local bulletin.
About a month from now, Kansas City voters will head to the polls to decide whether they want to renew the 1 percent earnings tax. It raises about $240 million a year.
The campaign is on. Mayor Sly James has spent weeks insisting that e-tax repeal would cripple city services: Get rid of the E-tax and police and fire protection could vanish. Property taxes and sales taxes would skyrocket.
He has offered carrots to go along with the stick. City Hall has rediscovered the East Side, promising to tear down empty homes, offering others for $1 and committing to more economic development in neighborhoods that could use it. We can expect more of this before Election Day.
Voters will almost certainly renew the e-tax, but it won’t be because they’re worried about cuts to city services. Most voters think City Hall wastes money, particularly on tax incentives for businesses. And because other cities have police and fire departments without an earnings tax, the idea that safety would be jeopardized without the levy rings pretty hollow.
Promises of cash and development on the East Side won’t help much either. The East Side is accustomed to empty promises before Election Day.
No. The reason that voters will renew the earnings tax is pretty simple: Much of it is paid by out-of-town residents.
City honchos are always squeamish when you ask how much of the e-tax comes from Kansans and Missouri suburbanites, but a good estimate is about $115 million a year. Why would residents of Kansas City, Mo., let their suburban neighbors off the hook for that amount? The people who use city services should help pay for them. End of story.
Opponents of the earnings tax have tried to overcome that reality by claiming that the levy disrupts the city’s growth. End the tax, they say, and jobs and business will flood into the community.
Yet if there’s anything we can learn from Gov. Sam Brownback’s ongoing, deepening Kansas disaster, it’s this: Cutting taxes to bring jobs and economic development is a fool’s errand. Most people don’t decide where to live or work based on tax policy, and Kansas City is no exception. Good schools, clean and safe neighborhoods, and high-quality housing, culture and entertainment are much bigger factors.
Don’t believe me? Ask yourself how many of the supply-side brainiacs who talked Brownback into cutting taxes have actually moved to Kansas. Or plan to send their kids to a Kansas college. Talk about a glide path to zero.
Someday, in the not-too-distant future, Republicans and Democrats will understand tax policy is a poor tool for social engineering. Taxes are what we pay to buy things together. They should be as low as possible, balanced and fair.
Kansas City’s tax burden is relatively low, and it’s pretty balanced. It fails miserably on the fairness index — relying far too much on flat sales and income tax rates that hurt the poor — but that shortfall is difficult for most voters to see.
So the earnings tax is likely to sail to victory in April. It won’t be because voters fear cuts in services, but because they think everyone who uses those services should help pay the bill.