it was not until 2011 that another Show-Me Institute scholar, Pro. Howard Wall,o Lindenwood University, approachedthe same issue (earnings taxes) with a policy paper rom a dierent angle. Wallconsidered the eects o earnings taxesin cities on population and employmentgrowth. Like Haslag, Wall started rom a universe o all 24 cities in the United Statesthat have earnings taxes. (He was orcedto eliminate three o them or insufcientdata or the study.) He then comparedthe population and employment growthrates in the 21 remaining cities to the othermid-sized or large cities within those samestates. In short, Wall limited his analysis tocomparing cities within the eight states thatauthorize local earnings taxes. Tis bluntscriticisms that the data is only showing nationwide trends (
, population shits tothe Sun Belt) in action. Wall ran a regression analysis onpopulation and employment growthrates or the 21 cities with earnings taxesand 155 without earnings taxes in thosesame eight states. Wall ound that thepresence o a local earnings tax reducedboth population and employmentgrowth. In Wall’s study, a 1 percent risein an earnings tax was associated with a 3percent reduction in population and a 2.3percent reduction in employment growthas measured over a decade. Like Haslag’s work, Wall’s study ound statistically signicant evidence that local earningstaxes are related to lower growth rates(or population, personal income, andemployment) in cities that adopt them.Michael Rathbone, a policy researcheror the Show-Me Institute, has prepared
FIGURE 3: POPULATION AND EMPLOYMENTGROWTH RATES BY CITY AND EARNINGS TAX
Earnings ax I No Earnings ax
Cities With Earnings axCities Without Earnings ax
FIGURE 2: CHANGE IN POPULATION AND EMPLOYMENTGROWTH BY CITY EARNINGS TAX PERCENTAGE
Source: Results o regression analysis on cities that did and did not have an earnings tax.