Mundo in the Morning - KCMO Talk Radio 95.7FM & 710 AM

Patrick Tuohey, Show-Me Institute | 4-8-26

10 min
Apr 8, 202610 days ago
Listen to Episode
Summary

Patrick Tuohey from the Show-Me Institute discusses Kansas City's failed earnings tax renewal vote, arguing the tax is regressive and symptomatic of deeper spending problems. He contends the city's real issue is inefficient government spending rather than insufficient revenue, and warns that Kansas City is falling behind peer municipalities without structural fiscal reform.

Insights
  • Earnings tax opponents achieved a 'moral victory' by getting supporters to publicly concede the tax is regressive, harmful to the economy, and hurts the working poor—undercutting progressive arguments for the tax
  • Retirees and wealthy investors who don't pay the earnings tax voted to keep it, revealing a voter bloc motivated by avoiding property and sales tax increases rather than fiscal principle
  • Kansas City's spending per capita ($4,400+) significantly exceeds surrounding municipalities, yet the city still faces a $55 million deficit, indicating a structural spending problem rather than a revenue problem
  • Political incentives prevent voluntary spending cuts; elected officials will always spend available revenue and claim service cuts are necessary if funding is reduced
  • Brain drain is accelerating in Kansas City as residents and business-minded people leave due to tax burden and poor governance, creating a vicious cycle of declining competitiveness
Trends
Municipal tax burden driving out-migration from major cities to lower-tax suburban and regional alternativesRegressive tax structures disproportionately affecting low-income residents despite progressive political rhetoricGrowing disconnect between stated progressive values and actual fiscal policy implementation in major citiesVoter coalitions shifting toward self-interest (retirees, non-earners) rather than broad fiscal responsibilityMunicipal spending growth outpacing revenue growth and peer city benchmarks, creating structural deficitsNonprofit advocacy organizations constrained by tax law from directly opposing ballot measuresLack of coordinated opposition campaigns to tax measures due to absence of organized donor networksCity competitiveness declining relative to peer municipalities due to tax and governance factors
Companies
Show-Me Institute
Patrick Tuohey's nonprofit organization that conducts policy research and advocacy on fiscal issues in Missouri
Kansas City Star
Local media institution criticized for supporting earnings tax while claiming to advocate for equitable government
Kansas City Public Library
Local institution mentioned as supporting earnings tax while advocating for just city policies
People
Patrick Tuohey
Guest discussing Kansas City earnings tax failure and municipal fiscal policy challenges
Pete
Host of Mundo in the Morning conducting interview with Patrick Tuohey about earnings tax
Mayor Lucas
Kansas City mayor who won earnings tax renewal vote and wants to eliminate five-year renewal requirement
Bridget Williams
Earnings tax campaign supporter who publicly called the tax a 'necessary evil' on KSHB
Quotes
"It is regressive. It harms the local economy. It allows for the lavish subsidy culture in Kansas City. It hurts the working poor and it is evil."
Patrick Tuohey, citing earnings tax supporters' own statementsEarly in interview
"The problem isn't revenue. The problem is spending. Listen, in Kansas City, we spend over $4,400 per person. And that is much higher than all the municipalities around us."
Patrick TuoheyMid-interview
"Effectively Kansas City is disappearing. We are not growing as fast as the country. We are not growing as fast as the municipalities around us. We are a failing city, frankly."
Patrick TuoheyLate in interview
"You're never going to get a politician to say, we're bringing in too much money. You're never going to get that. They're going to spend every bit we give them and more."
Patrick TuoheyMid-interview
Full Transcript
the! even if you don't, it doesn't matter if you work in Kansas City or not. If you are a Kansas City resident, you're paying the earnings tax. And then if you work in Kansas City but don't live in Kansas City, you are also paying the earnings tax. So I know one of those no votes in Kansas City yesterday came from Patrick Toohey, but he was outnumbered three to one. Good morning, Patrick. How are you feeling this morning? I'm feeling great, Pete. How are you? I'm feeling good, but I'm not paying the earnings tax in the last five years. You are. So why are you feeling great? Well, the outcome wasn't unexpected. I don't know that there was any opposition. I'll have to look up what the supporters paid. But if you go and look over the last two weeks, here are the things that supporters, supporters of the earnings tax said on the record. It is regressive. It harms the local economy. It allows for the lavish subsidy culture in Kansas City. It hurts the working poor and it is evil. Evil. All those things were said by people who support the earnings tax. Wait, who said, who said, who are the supporters who said that? It was on KSHB Monday night. It was Bridget Williams says the earnings tax is a necessary evil. I mean, she said it was evil and I think she's running the guess campaign. So again, it is a moral victory because all the arguments against the earnings tax have been conceded. The problem is that the people who say that they're progressive, that they care about the working poor, that they want Kansas City to grow, that they want equitable government are not living up to those principles. So the next five years, if these people are serious, and we will see if they are serious, they need to figure out a way that is an equitable, positive, just way to fund city government. Well, I think the opposite is going to happen because Mayor Lucas said last night in the victory speech, hey, my message to, well, let's just play it here. Here was Mayor Lucas last night. So the mayor is saying, Patrick, he wants it to stay and he doesn't want to have to renew it every five years. So that seems like the opposite approach of what you want. Oh, sure. And look, I don't doubt that the mayor doesn't want the people to have to weigh in on taxes. I get it. Of course, you would have that position. If I were mayor, I wouldn't want the people to have to check in on, on, you know, what I want to do either. But this is the system we have. The city should absolutely have to defend its taxing and spending. Of course, they should. But they just need to do a better job of it. And again, the institutions, the foundations, the Kansas City Star, the Casey Library, all these people that like to cluck their tongue about, you know, a just city need to put up or else it'll, it'll show that they just don't mean it. They just don't care. We had some callers yesterday. Patrick, admit this is bad policy, but I'm voting yes. Some of them were retirees who said, Hey, if we don't get this thing passed, they're going to raise my property taxes. They're going to raise my sales taxes. And right now, if I'm retired, you know what, I've paid it for a bunch of years and I, I don't want to have my taxes go up elsewhere, even though they don't pay it right now. So that block of voters is one that I didn't think much about. But it makes sense. And I appreciate their honesty when they say, Hey, you know what, what's good for me is to keep the earnings tax because I'm not paying it anymore. Anyway, as a retiree, yeah, no, and people who are wealthy in Kansas City who earn their income off of investments don't pay it either. That's part of the problem. The part of the problem is, even if you live in a household in Kansas City that is exempt from federal taxes, because your income is below a certain level, you still have to pay the earnings tax. This is exactly what makes it regressive. This is exactly what if you're supposedly a progressive, you should hate. And yet when push comes to shove, they just shrug and say, Oh, what can you do? Well, part of the problem in Kansas City is not revenue. The problem in Kansas City is spending. Listen, in, in Kansas City, we spend over $4,400 per person. And that is much higher than all the municipalities around us. And even with the earnings tax, our mayor says we have a $55 million deficit. The problem isn't revenue. The problem is spending. And yes, of course, they're always going to say, Oh, if you cut our tax, we're going to, you know, kill puppies and fire firefighters and police officers. They always say that it's the easiest argument for them to make. But what we need to do is take the money away from them and have them live within their means. Because again, you're never going to tell, you're never going to get a politician to say, we're bringing in too much money. You're never going to get that. They're going to spend every bit we give them and more. And so the argument that there's no plan B is, is BS. They have no incentive to come up with a plan B. Because again, why would you? But this guy's, this guy's point, and I think it's a fair one to make. Listen, I agree with you 100%. But the point he's making is even if, even if this earnings tax were to go away, do you believe that the politicians would then say, Oh, shucks, we got to live within our means, or would they just jack up taxes everywhere else and abuse you in other ways? I think it's the latter. They would certainly want to, they would absolutely want to. But again, that's what we've got right now. Right. So at best, you're saying, Well, we'll move from one bad system to an equally bad system. What I'm saying is, we're going to have to vote to restrict them to give them less money and make them, you know, deliver basic services in an efficient way. But the, but the broader picture, the broader picture that people in Kansas City need to understand is effectively Kansas City is disappearing. We are not growing as fast as the country. We are not growing as fast as the municipalities around us. We are a failing city, frankly. I love this place, but government is not doing us justice. And if we think that the status quo is adequate, we're going to continue to fall behind. And so it's not just a matter of the earnings tax per se. Kansas City has got to figure out all sorts of ways to deliver services more efficiently so that so that you and people like you in the area look at Kansas City and say that is a good place to live. That's a good place to raise a family. I want to move there. And right now they're not doing that. All right, Patrick Tuoy on KCMO Talk Radio. So with that being the case, why has there been no coordinated effort on the no side for years now on this? Because it was seemed to me, you know, you could like, why not have some big time donors across Missouri advocate for a no vote in Kansas City and see how it goes? Because we've never really tested that. And my understanding of state law is that if the e-tax were to go away, proponents can't just put it back on a ballot and bring it back. Like once it's done, it's gone. At least that's my understanding of the state law. So why has there not been a coordinated no effort on this? That's a great question, Pete. Why don't you put me in touch with some of your wealthy friends and in five years we'll put together that campaign. Well, how about the Show Me Institute? They've got some nice donors over there. Well, we can't, of course, you know, advocate for against ballot measures because we're a nonprofit. Oh, I didn't realize. Okay, fair point. But our job is just to let people know like, here's what's at stake. And, you know, yes, it's frustrating that they're that people didn't stand up and fight for this. But, you know, part of the problem in Kansas City is that all the people who give a damn about good government, about starting a business who want their children educated, so many of them have already left the city because they can. And that's again, part of the problem with the earnings tax is it provides one more incentive for people to pick up and leave the city. And not too long ago, Pete, you were living in Kansas City, you paid the earnings tax, and the decision you made was to get out of dodge. Yeah, that's that's a good point. Okay, all right, Patrick Tuey on KCMO. I'll work on that. I'll call up some rich friends after the show and I'll tell them to call Patrick and he will he will campaign and run the operation for 2031 sound like a plan. That sounds like a great plan, Pete. Thank you. All right, there you go. Thank you, Patrick. Great stuff. Take care. All right, see you later. He is adding something else that he's got to work on for the next five years. Gotta keep Kansas City in check. Show me Institute. He's got to occasionally fill in on KCMO and then he's got to run that campaign in five years. All right, I'm just putting more on Patrick Tuey's plate. Vince Collin A's is redefining news talk. I'm Vince Collin A's host of the Vince podcast. I'm bringing you the truth beneath the headlines of all of the nation's top stories in depth interviews. We feature newsmaking interviews with the top guests on the whole planet. And I'll ask the questions you only dream of other interviewers asking and a front row seat to the most important conversations of the day. It's a show with an obsessive focus on what's good for America. You are going to love Vince. The Vince show following listen on your favorite platform. Hey there. I'm Paula Pan. I help people make the smartest money decisions possible. Do not ever worry about your salary. 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