State & Local Government Policy, Business and Technology

Big Business Tax Breaks May Worsen Income Inequality

Governing: Early this year, construction began on a $130 million luxury high-rise apartment building in St. Louis’ burgeoning Central West End neighborhood. The development will dramatically alter the area’s skyline, but the city won’t be reaping much tax revenue from it anytime soon. Local officials approved a 95 percent property tax abatement that will be in place for a decade, as well as an exemption from sales taxes on the construction costs of the project.

These tax breaks coincide with steep spending reductions St. Louis made last year to bridge a budget shortfall. They are contributing to concerns that many neighborhoods and lower-income residents in the city aren’t benefitting from the tax breaks enacted to encourage projects like the luxury apartment complex.

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