If You Tax Something, You Get Less of It

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Business Climate | July 6, 2023

By Howard Wall | Read Time 1 minute minutes

Why do localities tend to rely more on property taxes than on income and sales taxes? Because property doesn’t move when it’s taxed, unlike people, who can adjust where they live, work, or shop if they feel their tax rates are too high. St. Louis and Kansas City are unusual in this regard. In these cities, government revenue from property taxes is about half the amount of government revenue from taxes on individual income. This paper explores the price Missouri’s two biggest cities pay for their reliance on individual income (i.e., earnings) taxes, in terms of both population growth and employment growth. Click here to read the entire report.

About the Author

Howard Wall

Howard J. Wall directs the Center for Applied Economics at Lindenwood University and directed the Hammond Institute for Free Enterprise from its founding in 2012 until 2022. Prior to joining Lindenwood in 2011, he was a vice president and regional economics adviser at the Federal Reserve Bank of St. Louis. While at the St. Louis Fed, he established and directed the Center for Regional Economics-8th District (CRE8), which provided economic analyses of issues affecting state and local economies. In addition, Dr. Wall spent 10 years as an academic in the economics departments at West Virginia University and Birkbeck College, University of London; had two stints as a visiting scholar at the Bank of Japan; and was a senior Fulbright scholar at the Instituto de Economia de Montevideo, Uruguay. He has published more than 50 papers in scholarly journals such as the Review of Economics and Statistics, International Economic Review, Economic Journal, Journal of Urban Economics, Regional Science and Urban Economics, Journal of Money, Credit and Banking, and the Journal of Regional Science.

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