The e-tax, in case you’ve forgotten last spring’s Keep Kansas City From Getting Worse! campaign, raises about $200 million a year. The city uses the money to pay cops, pick up trash and provide other kind-of-important services. The 1-percent tax on income also assists development districts that receive tax-increment financing (TIF). The Kansas City Fed headquarters — which opened in 2008 under Hoenig’s “leadership,” according his career backgrounder — happens to sit in such a district.
TIF is a powerful tool that more or less traps tax revenue at its source. The Kansas City Power & Light District, for instance, was financed by bonds that are supported by the sales, property and earnings taxes generated at the site. (The district isn't producing as much tax revenue as was expected, forcing the city to reach into the general fund to pay the creditors. But that's another story.)
The Fed built its new headquarters in a TIF district the city created in 1994 to assist with the redevelopment of Trinity Lutheran Hospital. Trinity closed, but the boundaries of the TIF district remained in place.
When the Fed committed to the site, which is between Main Street and Penn Valley Park, the TIF district was in line to receive millions of dollars. Hoenig had ideas about how that money should be spent. He went to the City Council and asked for the TIF dollars to pay for improvements to Main Street and Penn Valley Park.
New sidewalks are great and all. But they cost money, and the money has to come from somewhere. The earnings tax is one of those sources.
At the chamber event, Hoenig seemed to want to make an argument that taxing people's toil is the wrong way for cities to raise money. Fine. But it would be nice to know how Hoenig would provide services to the parts of town where no one wants to build a headquarters.
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rman33 - you're way too articulate to be posting on this website. I sure hope you're a registered and active voter.
rman is an idiot. the american revolution wasnt about high income taxes as he would have you to believe. it was about tariffs on imports and exports such as tea and tobacco. also the colonist had essintally no problem with these taxes. it was about taxation with out representation.
american colonists wanted the protection from the british during the 7 years was, but afterward didnt want to pay for said protection via taxes to the british parliament.
How can KC pay the bills without the E-tax? Gee, maybe the same way the vast majority of cities that don't have such a tax manage to keep going. Here's one way to start: put an end to taxpayer-funded handouts to wealthy and well-connected developers disguised as urban renewal. Anyone who's paying attention can see that the blighted parts of KC are still blighted and there appear to be absolutely no plans to do anything about it. Meanwhile, complete bullshit like calling the Plaza "blighted" is foisted off on the public, usually with the eager assistance of local media.
You say “Hoenig did not suggest an alternative”. Why should he? To suggest an alternative is to miss the main point of those opposed to the earnings tax (and it is “earnings tax” not “e-tax” – the intent of those promoting the acronym is to make it seem more modern or somehow ‘progressive’). The main point is that the cumulative effect of taxes (not just the earnings tax) presents an extreme burden to those who actually pay them. The earnings tax is one of the most unfair taxes around and should be first in line for elimination. Not replacement. Elimination.
This is about shrinking the size of government. The earnings tax does not need to be 'replaced' with anything. Cut the size of government and government expenditures. No other city in the metro has an earnings tax. Are those who run Kansas City too stupid to figure out how to run the city without the tax? Hint: You do it by cutting social and non-essentials services not the number of emergency personnel as the proponents would have you believe.
So few people realize that the American Revolution was fought, in part, due to 'outrageous' amounts of taxation at the hands of the British. That rate of taxation, in total, amounted to between 2 and 4 percent of one’s income. In 2011 middle class taxation in total (income, sales, property, real, gas, booze, etc.), exceeds fifty percent. The only ones who are not outraged by this are those who put our tax dollars in their pocket while paying little to no taxes themselves. Yet DNC parrots and pseudo intellectuals on the left are outraged that no one wants to pay even more taxes to expand their socialist agenda.
Government at all levels needs to shrink. Local government needs to be cut back to the basics: infrastructure (streets, parks, and government buildings), security (police and fire), education and administration (legislature, mayor, courts). Why does the city need to operate 2 airports, a bus line, fund low income housing, or have a ‘solid waste division’? Those things should be paid for by those who use them. The city should not be in the business of refuse collection and refuse collection is a perfect example of services that the city should not be paying for. The earnings tax generates 200 million a year. Charging KC residents the going rate for trash pickup would in and of itself generate 200 million dollars a year. This illustrates how expensive refuse collection and the other programs are. The government, at any level, should not be paying for these types of services.
We need to cut the size of government at all levels back to the bare essentials. Shrinking government is the only way to reduce the tax burden over the long haul. Eliminating the earnings tax and not ‘replacing’ it with anything is an important step. Unfortunately it will now be nearly five years before the next vote. Probably not enough time to convince the ignorant, vocal minority who favor such taxes as an aid in imposing their brand of socialism on this nation. Maybe the continuing flight of people and businesses from the city will cause the light bulb to come on over their heads.
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