Sunday, April 10, 2011

For an example of biased “journalism” see: Earnings Tax is tip of broader debate on city’s future by David Nichlaus of the Post Dispatch

Adam wrote on April 6 about the mayor of St. Louis planning for the demise of earnings tax despite the overwhelming support it received. . As any good journalist would, he pointed out that Rex Sinquefield's donations to the mayor raised the possibility of conflict of interest. Today David Nicklaus of the Post Dispatch took up the effort to repeal the earnings tax in opposition to the voters.
Mr. Nicklaus acknowledges that the voters overwhelmingly approved the tax. How could he do otherwise? However he asserts that the earnings tax is what prevents the city from being competitive. How did he arrive at such a conclusion? He based it on this statement by a contractor working for the Missouri Council for a Better Economy which is funded by Rex Sinquefield. So Randy Bauer, a man currently working for Rex Sinquefield, says
“We do a lot of work in a lot of cities, and I cannot think of another metro area where the suburb of 20,000 has a skyline like Clayton has. There is a reason all those companies have decided to go there.”Mr. Bauer does not say what the reason is but David Nicklaus assumes he means the earnings tax.
Maybe Mr. Bauer does not give a reason because like Mr. Nichols he has not studied the issue. Perhaps Mr.Bauer has standards of honesty and professionalism that preclude such a statement ? David Nicklaus is not burdened with such standards so he can say anything.
So if one wanted to honestly study such a phenomenon he or she might begin with some research before performing analysis.
How many cities have earnings taxes in the U.S.? answer 14 states and the district of Columbia a list encompassing hundreds of cities.

Has there ever been a documented scientific study that demonstrates that employers avoid such cities? In truth I do not know. Nor apparently does Mr. Nicklaus. Mayor Schoemehl did tell me personally that studies showed no correlation but I cannot speak from personal knowledge.
Of those how many like St. Louis have a competing burb like Clayton? Admittedly I have done no research but according to David Nicklaus's expert Randy Bauer, none. I will take him at his word.
How many cities that have a competing burbs like Clayton are a city which is also a county? If we assume that Mr. Bauer's assertion about no other city being like St. Louis, I would have to assume that St. Louis is the only city with only 72 square miles incorporated competing with its own county. (sloppy scholarship I admit but I make no claims)
Having dismissed Mr. Nicholas unsupported assertion that the earnings tax is THE reason lets go on with the rest of his article which is about the “excellent study “commissioned by Rex Sinquefield to explore how the replacing Earnings Tax can be accomplished.
According to David Nicklaus the study makes suggestions that will “anger powerful interest groups.” You know those interest groups, aka special interest, the people who unlike Rex Sinquefield and his toadies don't have the city's’ best interest at heart. The powerful interest groups include :

Homeowners : Nicklaus, Mayor Slay and Rex Sinquefield want to raise property taxes but those selfish homeowners may not think that is fair. The homeowners fear losing their homes, the renters higher rents and everyone fears paying a dispropotionate amount.

Small business owners and consumers: Rex Sinquefield et al want to raise sales taxes but those selfish business owners fear losing their businesses and the consumers skyrocketing prices or being forced to shop outside the city.

Hotel and entertainment industry: these selfish folks are concerned about scaring away tourist and conventions thus costing us millions in economic activity and thousands of jobs.
Not for Profits: The city’s largest employers feel that their not for profit status is deserved and that they should be rewarded for what they bring to the community not penalized. Evil Not for Profits.
Now I will say that Mr. Nicklaus makes one argument that may be valid. He says that a large reliance on one revenue source is not balanced. However I must ask; Is the earnings tax dependent on one revenue source or is every business is the city plus every business a city employee works in a fairly diverse source. Plus is 30% too great in one source?
The article ends “Just because something is difficult does not mean it is not worth pursuing. “ I must agree but is there any evidence that this change is worth pursuing? I mean besides the benefit to Rex Sinquefield?


  1. I am a bit confused--are there people named Nicklaus, Nichols and Nicholas being referenced, or is spell check messing with you?

    It would be interesting to see someone do some research into all of the claims mentioned in the article. It is interesting to see how many people are willing to just accept what business mouthpeces say and go from there without doing any further research.

  2. There are public forums in which Randall Bauer will present from his study - May 17 5:30 at RAC, May 18 5:30 at St. Louis Association of Realtors, and May 19 at the Stable 5:30