St. Louis earnings tax facing new scrutiny

One new focus of the debate over St. Louis’ earnings tax lies behind the open spaces and amazing views of the Polsinelli law firm’s downtown office, much of which was paid for with the city’s earnings and payroll taxes.

In 2010, the city of St. Louis diverted half of the earnings and payroll taxes paid by Polsinelli and its employees to fund up to $3.6 million in office improvements, meaning the 1 percent tax levied on Polsinelli employee salaries and on the firm’s net profits paid for the renovation, but not for police officers and fire trucks. Now, the deal is in the spotlight as the city argues that every cent of the $160.7 million in annual revenue that the earnings tax delivers is vital to its survival.

City Hall leaders say the earnings tax is the fairest and most equitable tax they have to provide services with a regional reach. The government has become more and more reliant on it even as local wage taxes have come under attack in cities across the nation. Still, if the earnings tax is re-approved in St. Louis, some argue more companies will seek special breaks from the tax, potentially eroding the earnings tax base that makes up 33 percent of the city’s general revenue.

On April 5, St. Louis citizens will vote if the tax will remain in effect.

Read more: St. Louis Post-Dispatch


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