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A Taxing Proposition

November 4, 2010

It looks like Kansas City, Missouri will let its voters decide if they want to pass Prop A. The proposition, if passed, bans cities from imposing their own earnings tax.

Like most people, I do not like paying taxes, but I understand that they are necessary to pay for public services. How else do we pay our school teachers, firemen, and police force? Taxes have a bad reputation, but they also create jobs, and in this economic climate, we need to get our citizens back to work.

Should Prop A pass, cities would have to find other ways to pay for public services. One of the first things that usually happens is a cut in jobs as cities look to slash their budgets.

Public services and jobs aren’t the only things at risk with a tax cut. According to Frederick Lee, a Professor of Economics at the University of Missouri-Kansas City, “It’s going to hurt approximately one million people’s lives within (Kansas City and St. Louis) because of the uncertainty about maintaining income for the city, and the intent to provide for a better life for people in the city.”

We may see unemployment in the Kansas City area, as well as other cities in Missouri that have passed Prop A, increase as people become more uncertain about the times. Don’t we want people to be working again, so they can spend their money and get things rolling?

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One Comment leave one →
  1. Ollie permalink
    November 5, 2010 6:02 am

    Good news / Bad news

    Bad news – Prop A passed
    Good news -the voters inside St. Louis and KC(south of the river) overwhelming voted it down, so come May when its earnings tax is up for vote, KC and STL should be able to keep the tax and keep budgets in line with past expectations.

    One of the more important issues that most people have neglected is this!
    Cities primary source of funding * projects* are issuing MUNICIPAL BONDS,
    Prop A now puts cities cash flow in jeopardy, having to be voted on every so often. This puts the bond rating-value- interest rate, on shaky ground. KC and St. Louis may only be able to get issued municipal at junk bond rates because of income insecurity. What if they cannot move ahead on many projects because they can’t repay at the high yield/ high risk rates? Their financing and corresponding ability to implement these bond funded projects could be over essentially. This is the slow-acting poison of the Prop A snake, that everyone has overlooked.

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