What a Property Tax Cap Would Mean to St. Paul
From:
Bob McLean
Date:
May 19 23:17 UTC
Short link
There are problems with a city income tax:
First, if Saint Paul were to adopt an income tax and Minneapolis and the other
metropolitan communities did not, businesses and residents would leave the
city. This has happened in St. Louis, Kansas City, Detroit and Philadelphia.
Second, an income tax can be very volatile. New York's economy suffered a
sudden economic downturn in 2001 - 2002 and quickly experienced a rather severe
revenue shortfall as a result.
Short Story: In the early 1990s, New York City had had a very high combined tax
that included property tax, sales tax and individual and corporate income tax.
Even with the high rates, the City was suffering sever financial problems. As
odd as it might sound, in 1997, instead of raising its taxes, New York City
reduced its property and income tax rates and after the reduction, New York
City's job growth rate exceeded the national average for the first time since
1950. The increased economic activity created considerably more revenue for the
City than was lost in the rate cuts.
.