In his 2013 book, The Great Escape: Health, Wealth and the Origins of Inequality, Nobel Prize winning economist Angus Deaton wrote, “The very wealthy have little need for state-provided education or health care; they have every reason … to fight any increase in taxes.”
Deaton was making a case for democracy and against the superrich having outsize influence in our nation’s political process. Two recent campaigns in Missouri to abolish a local tax that funds a variety of programs from public park maintenance to human services are a case study in why everyone needs a voice.
Rex Sinquefield, a Missouri billionaire, is on a relentless quest to quash local and state taxes in Missouri. A 2015 St. Louis Post Dispatch profile quoted him touting his philosophy on taxes: “Get rid of your personal tax, get rid of your corporate taxes, don’t punish work, don’t punish profits, don’t punish productivity. Those taxes punish the things you need the most of ... You end up hurting people at the bottom if you try to overtax the people at the top. You don’t want to punish the investing class.”
He is also on record lauding the disastrous 2012 tax cuts in Kansas as “unbelievably brilliant.”
In other words, Sinquefield is a zealous devotee of the oft-repeated but thoroughly debunked economics of Arthur Laffer. And unfortunately for Missouri, Sinquefield puts his money where his zealotry is.
This year, Sinquefield spent millions of his own money on a campaign to persuade St. Louis and Kansas City residents to vote to end their cities’ earning taxes. The 1 percent levy on wages and salaries funds about 40 percent of Kansas City’s budget and 33 percent of St. Louis’s operating budget for services such as local parks, street and sidewalk maintenance, police and fire protection, lead poisoning prevention, and human services including those for veterans, youth, and families in need. Sinquefield’s St. Louis campaign argued in a slew of ads that the city should let the tax expire and instead cut a third of its budget for city services. Sinquefield’s actions indicate he doesn’t value the services the tax supports, and he is spending millions to convince other Missourians the tax is not necessary.
But Show Me State voters reject his misguided ideology-driven campaign. Residents of both cities overwhelmingly (77 percent in Kansas City and 72 percent in St. Louis) voted to uphold the taxes in spite of Sinquefield’s well-financed efforts. After Kansas City tallied its votes, mayor Sly James, speaking about Sinquefield said, “We do not need outside interference, we do not need your guidance, we certainly don’t need your negativity,” and added, “Voters are sophisticated and intelligent enough about this tax to understand what it does for this city.”
Sinquefield, perhaps, is betting that long-term persistence will pay off. His spring campaign to abolish the earnings tax is far from an outlier. In 2010, he put more than $10 million into the initial effort to require a vote on the earnings taxes every five years, and he has poured money into many other efforts at the local and state levels to elect anti-tax candidates and slash Missouri’s state income tax.
So while Sinquefield may want to opt out of local taxes and the services they support, Kansas City and St. Louis voters have made their preferences clear, choosing to continue to pay a 1 percent earnings tax to invest in their local communities and fund the services they value.