E-flipped

My all-time favorite racket that is the Kansas City, MO earnings tax is in the news again and since I enjoy a good debate as much as the next guy I might as well put in my own 2 cents. I don’t consider it any more then an exercise in debate because I don’t expect the tax to be repealed any time soon. People of Kansas City may not be able to elect competent officials who can run an efficient city, but they know what’s good for them when it comes to $200 million of other people’s money.

As always the Kansas City Post wrote a thoughtful and not just an emotional post so I felt like participating in the discussion. Obviously there are a lot of misinformed people who think that the e-tax is somehow makes out-of-towners like me share the burden of using the infrastructure and amenities that Kansas City has to offer.

As one of the commenters pointed out:

You and Brent both neglect the costs inherent in coming to KCMO to earn a living and then heading home to the burbs. Examples:

1) Do you use the toilet at any time you are in KCMO?

2) do you use water to wash your hands or make coffee?

3) Do you drive on our streets and rely on drainage systems to keep them from flooding?

4) Do you ever drive in over here after the sun has gone down and use the streetlights? W

5) What about the police, firemen and EMTs you would rely on if there were an emergency at your office?

Consider your e-tax your little share of the burden.

This is misguided but common sentiment. The building where I work pays utilities and property taxes, which my company passes on to its customers. This covers all my coffee, toilet flushes, hand washing and use of the street lights. If I am using a business like a bar or a gas station these expenses are built in the prices of goods and services. There are no free toilet flushes in this country and someone other than a taxpayer always pays for them in one form or another. Property and sales taxes also cover police and firemen, and EMT will promptly bill my medical insurance. Even if it wasn’t true, when any KCMO resident leaves the city limits he or she is using the same and probably better services without being charged, so at the least we are even.

In these kinds of arguments people always mention the sport teams or other entertainment venues such as Sprint Center and Power & Light, theater district, the Zoo and other points of interest located in Kansas City. All these places are not free and if the cost of tickets and parking does not reflect the true operating costs they should just raise the prices and let people decide if they can or cannot afford the ticket. The same goes for the KCI airport which charges its own taxes as a part of the airline ticket; Downtown Airport expenses are included in the price of the UPS or FEDEX delivery services; pretty much anything you can name should not be subsidized by the city. As a matter of fact, I don’t think anyone asked Kansas City to subsidize these businesses and attractions, they chose to do this in order to generate sales taxes, create or keep local jobs and don’t need to act like they are doing just because they are so nice and neighborly.

Then there is always someone who would accuse me of being against all taxes, but that’s not true: I pay income taxes in Missouri but don’t complain about it too much because it works both ways, Missourians who work in Kansas pay taxes there; unpleasant but fair.

All the childish arguments aside, the only real reason for the e-tax is that it helps the residents to live in the city without paying the true costs needed to sustain the necessary services and infrastructure. If the tax is repealed, the general fund will be shortchanged by some $200 million with all the catastrophic consequences this may cause. The only problem is that while people like me are being robbed in order to maintain the general fund, many Kansas City residents don’t even have to pay property taxes.
This is the building I see every day across the street from my work. Like a big middle finger from the city of Kansas City,MO it reminds me every day that the politicians who run it find it easier to take money from the people who have no vote in the matter, than resisting the developers, or sport franchise owners or corporations who instead of contributing to the general fund, prefer to contribute directly to the politicians in charge.

The 25 year tax abatement is featured prominently on every side, high and low.




The residents of this building are not poor, some condos are on the market for $300K and up with the penthouse possibly valued at $2 million. These are the proverbial “rich, the “top 1 percent”, the ones with deep pockets who should be contributing their “fair share” and yet they get to see me out of their panoramic windows, paying for their toilet flushes, stoplights and sports teams.

I am not completely heartless (depending on who you ask) and I am willing to be forced to help my Kansas City neighbors who frequently entertain themselves by making snide remarks about the suburbs, while firmly keeping their hands in the pockets of people who live there. I always maintained that there are ways to make me feel better while being screwed, it could be free parking at the P&L or a discounted ticket to an event. I am not asking for much. For example many attractions in St.Louis are free, although not just to taxpayers – to everyone, but it’s still someting.
In the meantime you don’t have to buy the stories about the impending doom and gloom if the e-tax gets repealed, the city has plenty of money to pay for the party room with a panoramic view, two pools, a tennis court and a 24-hr security/doorman. Maybe in the same pile they can find a couple of dollars to plow your street.

And see if they owe you a refund.

  • Mark

    Thanks for the link. Ahh the old Vista Del Rio. Or as we used to call it, the Crack Stack. Another Cleaver legacy. It is maddening to see those “tax free” banners isn’t it? What gets my blood up is the developers telling us with a straight face that they are passing those abatements on to the condo buyers. Complete BS! Take two condos, side-by-side, identical in every way. One has a 25 year tax abatement and the other pays the full bill. Do you price them the same? Of course not. The net present value of the abated tax payments were pocketed by the developers before the first “For Sale” sign went up.

    As I’ve said, I’m no fan of the e-tax, but if people are going to propose its demise, they should have a plan in place that involves more than outright repeal.

    • Mark,just run for the Mayor already. How many d-bags have to be elected before you break down and do it.

  • Well stated, m.v.

  • Old Fart

    Mark, you want a plan to replace the tax lost by the repeal of the E-tax? Here you go. Every property owner in Kansas City pays taxes on property owned. No exceptions.

    Thats the plan.

    • Mark

      M.V.,

      I couldn’t even make it out of an in-district council primary. I doubt “mayor” is in my future!

      • Mark,next time you run for something,anything, let me know. I’d be happy to help with anything I can.

  • Is that the place just South of your building? Last time I was down there they had just finished gutting it. If the upper crust live in it, I’ll bet they don’t go to neighborhood parties with the tenants of the place just east of you. All 4 people I ever knew to live their had their apartment or auto burglarized.

  • Yeah, the e-tax is as un-American as you can get. A tax on someone who doesn’t get a vote on what the money is used for (even a fake vote, like the current Federal system has). There was a time when Americans strenuously and violently objected to taxation without representation. But then again, there was a time when the Bill of Rights was more than just a punchline.

  • Philmo

    I’m with you on this. The city has been robbing me for years to the tune of about 10k so far and I don’t get jack for it.

    Why do I have to help subsidize the city? I get to pay $60 a month for my trash and a couple hundred dollars for their trash.

    I would love to see K.C. residents pay their own way like I and everyone else who doesn’t live in K.C. have to do.

    I don’t like having to subsidize K.C. voters poor decisions when they vote for their elected officials. There should be some kind of oversight that says if they can’t spend all the E-Tax money in a prudent manner than they can’t have any more money for 10 years.

    And those frikkin’ tax abatements chaps my hide. It’s insanity at it’s finest.

  • Burrowowl

    If you work for a company in Kansas City but don’t live there, you should go to your boss and demand that they compensate you for the extra tax, as a cost of doing business. There is an implied tax and utilities saving they’re benefiting from because Kansas City because the general fund is being subsidized by non-residents. If they won’t do it, get a job elsewhere. Indenture is illegal these days, so you don’t have to work there.

    Alternately, see if you can’t get the good people of the city to raise taxes and fees on themselves so that you aren’t inconvenienced any more. Good luck with that.

    It’s all part of the game: a city, county, or state gives tax incentives to a few people (normally employers, sometimes homeowners) to get them to lure a bunch of suckers in that don’t directly benefit (such as yourself) with jobs. For the low low cost of shaving a few thousand dollars a year off of your boss’s operating expenses, they get the opportunity to hit all of his workers with earnings taxes and probably a variety of sales taxes, parking fees, and such that come up when you go out for lunch or forget to feed your meter.

  • nowadays suggestions to get a job elsewhere sound insulting to people who can’t get one anywhere.so the only choice left is bitch, so that’s what I am doing

  • I travel for JOOLS

    If you think about it, many states and cities tax us even if we never set foot in them via a redistribution of the wealth, so “popular” these days. Look at California. They claim to need a federal bail out (i.e. our tax dollars) because they can’t pay for their own extravagant spending policies. Their teachers are the highest paid in the whole country while their children are among the worst educated in the whole country. They spend over $10 billion per year on illegal immigrants. And, they won’t even drill for their own oil because of their sacred environmental concerns. Other states and cities are clamoring for bailouts from us too.

    One thing is common to all these schemes. If you work and pay taxes, you can be sure you’re paying for some rich developer to get richer or someone who is all too happy to sit on his/her ass and live off your labors.

  • I travel for JOOLS

    And I just ran across this little article. The money quote, California’s unionized public employees can retire at 50 and receive 90 percent of their last year’s pay FOR LIFE !

    AND THEY WANT US TO BAIL THEM OUT ????

    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/08/AR2010010803593.html?nav=rss_opinion/columns

  • Burrowowl

    Jools – The State of California negotiated those retirement terms with their various unions. My wife makes significantly less as a state employee than she should in a comparable position working for the county, but then she’d give up the favorable retirement, health, and dental benefits. It’s part of the cost of employing them, known and agreed to in good faith.

    As for the all-caps outrage, how about California only gets back 78 cents on the dollar for our federal taxes. We’ve been subsidizing other states for decades. Missouri meanwhile gets $1.23 in federal spending for every tax dollar you guys pay out. You’re a welfare state riding our backs. We just want some of our money back to help settle our checkbook. Kansas gets $1.12, for those interested.

    http://www.taxfoundation.org/research/show/266.html

  • I travel for JOOLS

    Burrow – I can understand your point about getting what you’re promised, but clearly what California public employees get in the way of compensation and benefits and pension far exceeds what is reasonable in comparison to most other states. Your inflated salaries, etc. lead to higher taxes owed and paid to Uncle Sam and now you want that money back. In addition, you are driving private businesses out of your state because they cannot afford the salaries and taxes in California. How about the state paying reasonable salaries for services performed and public workers then would pay less taxes to Uncle Sam and Uncle Sam would then be paying back comparatively more to the State than they are now, and best of all the state financial picture would improve. The state is in a ditch because of their excessive spending and unless they cut their spending, people will lose these great jobs and services will disappear for the needy.

    I know you’re probably shaking your head right now at my logic, but such it is. We’ve got to quit this excessive spending or the whole country will go bankrupt. The AVERAGE federal employee makes $70 K a year and the average private employee makes something in the $40 K range for a comparable job. That cannot continue either. Government does not make money, they only spend it.

  • I’m not trying to butt in on the tete-a-tete between JOOLS and Burrow, buuuuutt…..

    JOOLS is absolutely right about the overspending. The hard facts are that people in our country in general (and California in particular) have had it too good for too long. Unfortunately, it’s time to pay the piper. That payoff comes in the realization that we can’t continue spending money that we don’t have to artificially improve our standards of living.

    A lot of ordinary Americans have already figured this out. I just wonder how long it will be before our government reps figure it out.

  • Burrowowl

    Jools – I think your argument would hold more water if the tax revenue to federal spending ratio were made up entirely by highly-paid state employees. That’s very much not the case.

    The median income for a 4-person household in California is $74,801. It’s $63,274 in Missouri (http://www.census.gov/hhes/www/income/medincsizeandstate.html). It costs more to live here so we demand higher wages so we sit in higher tax brackets and pay more taxes and have to pay our teachers and cops and firefighters and bureaucratic worker-drones more money to get whatever we get from them. Historically companies have found that operating out of California is lucrative and workers have found living here to be pleasant. Part of the reason we’re such a big tax base is because it’s such a prosperous place to do business.

    We definitely have a budget issue internally, but our situation might go a little better if, just to use an example you offered, instead of paying billions of dollars on illegal immigrants our federal government did its damned job regarding immigration and naturalization. Or at least offset our spending on matters related to their failure to hold up their end of constitutionally-mandated government functions.

    And yes, we drill our own oil. Take a drive around LA some time and you’ll see the pumps. Up until 1994 we produced more oil than we imported.

    Missouri had a total federal tax burden of $5604 per capita and federal spending of $8209 per capita ($2605 in favor). Compare that to California’s burden of $7012 and spending of $6571 ($441 against). Cut me a check for $1500 every year and I’ll call it even.

    Of course, I’ve been encouraging my representatives in Congress to hold out for more pork for years. The stupid hippies would rather “do the right thing” than let themselves get bought like responsible politicians do.

    Emawk – I agree overspending is an issue. California is spending too much money on federal programs for other states. Like Missouri.

  • KC Lowlife

    Frankly, I don’t have an opinion on almost every thing you’ve said about the tax in your post. Same goes for almost all the comments.

    But claiming that California has one of the worst education system just isn’t true. There’s a reason why students from other states move to Cali, work for a year and then become Freshman. And since I’m picking a beef, I’ll come with the facts: http://www.edweek.org/ew/articles/2006/01/05/17shr.ca.h25.html

    Now do I think that they overspend way too much? Absolutely. Do I think they deserve a bailout above and beyond the rest of the states. Hell no.

  • Bob

    Pardon the late post….but, RIGHT ON, Meesha. I paid the E-tax for 18 years. I worked for the feds, and we even had our own police. The fire guys showed up occasionally for a false alarm. The only city service I used was a half mile drive on city streets. For that, I was charged 1% of my gross pay. I had two kids in college for a number of years. I had to rent a van to move them to college and back home, twice a year. A week long van rental cost me $56 per year in taxes solely for the construction the Sprint Center. It cost KC residents…zero. And to think of it; I’ve never been to the Sprint Center, even though there is probably a seat with a little brass plate with my name on it. So, to put it as politely as I can, screw KC.

    • I feel your pain…every payday