Missouri House special committee to focus on St. Louis’ 1% earning tax

(The Center Square) – The Republican chairman of a special House interim committee on the earnings tax believes its impact on the City of St. Louis also affects all of Missouri.

“The City of St. Louis and the region is the economic engine of the state of Missouri,” Rep. Jim Murphy, R-St. Louis, and chairman of the special committee, said in an interview with The Center Square. “We’re losing people, companies are moving out and we need to address that. The city hasn’t addressed that and the state has an obligation to make sure the region stays strong.”

Speaker Dean Plocher, R-St. Louis, announced the creation of the committee to examine the 1% tax on salaries, wages, commissions, tips and other compensation paid to a person living or working in St. Louis or Kansas City. A media release from Plocher’s office said the City of St. Louis receives 36% of its general revenue from the tax.

“An earnings tax is a regressive tax and it puts St. Louis against St. Louis County and St. Charles County,” Murphy said. “They’re put at odds with each other because a company can move out of the city to the counties and they don’t have to pay this tax.”

Murphy was elected to represent his district south of St. Louis in 2018. He said discussions on the earnings tax have been ongoing amongst legislators.

“The city is so ingrained in collecting this tax that they haven’t looked at what the alternatives are,” Murphy said. “And we’re not looking at taking away funding but replacing it. Because this is hurting the city and St. Louis County.”

Rep. Ben Baker, R-Neosho, will serve as the committee vice chair. The rest of the committee will be comprised of Reps. Ben Keathley, R-Chesterfield, Wendy Hausman, R-St. Peters, Tony Lovasco, R-O’Fallon, Mike McGirl, R-Potosi, Marlon Anderson, D-St. Louis, Steve Butz, D-St. Louis, and Maggie Nurrenbern, D-Kansas City.

Murphy wouldn’t speculate on any committee outcomes and emphasized it will review data presented. He also added an area of concern.

“The way the city is going about charging remote workers an earnings tax, we think, is probably unconstitutional,” Murphy said.

Even with two Democrats who serve districts in St. Louis, Murphy expects St. Louis leaders to declare the committee’s work as intrusive.

“It will be perceived as that and we knew that when we moved forward with this,” Murphy said. “But I’ve had a conversation with the Democrat members of this committee and they’re on board. They understand what our charge is. And we’re not going to hurt the city.

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