If You Tax Something, You Get Less of It
Why do localities tend to rely more on property taxes than on income and sales taxes? Because property doesn’t move when it’s taxed, unlike people, who can adjust where they live, work, or shop if they feel their tax rates are too high. St. Louis and Kansas City are unusual in this regard. In these cities, government revenue from property taxes is about half the amount of government revenue from taxes on individual income. This paper explores the price Missouri’s two biggest cities pay for their reliance on individual income (i.e., earnings) taxes, in terms of both population growth and employment growth. Click here to read the entire report.