SAINT LOUIS--A new study released by the Show-Me Institute today argues that the earnings tax is holding back economic growth in Saint Louis and Kansas City. The study compares the economic records of Missouri's three largest cities and finds that Springfield--which does not have an earnings tax--has far outpaced Saint Louis and Kansas City in job and income growth. Joseph Haslag, author of "How an Earnings Tax Harms Cities like Saint Louis and Kansas City," will present his findings at a noon luncheon in Saint Louis.

Haslag, an associate professor of economics at the University of Missouri, Columbia, will show how the stagnation of St. Louis and the anemic growth of Kansas City can be explained by the perverse incentives created by the earnings tax.

"I'm thrilled that the Show-Me Institute will be releasing Joe's study," said Rex Sinquefield, president of the Show-Me Institute. "The earnings tax has been holding St. Louis back for decades. I remember my mother talking about how it was hurting the city when I was a kid. The study should spark a long-overdue debate about how we can remove this barrier to economic growth."

Haslag reports that after adjusting for inflation, total income in the Saint Louis suburbs has increased by two and a half times since 1970, while total income in the city actually fell. In contrast, the city of Springfield has seen its total income grow by a factor of three.

Saint Louis has been falling behind its suburbs in job creation too: in 1970, more than half of all metropolitan area workers worked within the city limits. Today, that number is just 22 percent. On the other hand, Springfield has managed to keep the lion's share of area employment: 88 percent of Springfield-area employees work in the city, down from 92 percent in 1970.

The full Study is available online.