Arch City Pundit

The Clayton, MO-based Show-Me Institute, a free market think tank, has released a study (PDF) showing the harm city income taxes have on urban economic development.

In the report, Haslag shows how income and employment have shifted from St. Louis to its suburbs.

The report also compares the 23 U.S. cities with earnings taxes to other American cities. One finding: Having a 1 percent earnings tax caused a city’s per capita income to drop 5 percent, relative to the surrounding metropolitan area.

Haslag said the trend is the result of employers locating where they don’t have to pay the tax.

Haslag also compared Kansas City and St. Louis (the only cities in Missouri imposing a tax) to Springfield (which, obviously, has no tax). He found that while all three cities have lost population and employers to their respective suburbs, the urban portion of the Springfield MSA has fared better than its eastern and western counterparts.

More at the Post-Dispatch Mound City Money blog.

economics, politics, Show Me Institute, St. Louis, taxes

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