A proposal to eliminate the state income tax on Social Security benefits could be greatly expanded by a House committee. House Speaker Rod Jetton (R-Marble Hill) tells a House committee he has expanded on his proposal to remove the state tax on Social Security benefits to include public pension beneficiaries. And Jetton isn’t sure he wants to stop there, telling the committee, “Originally, I was concerned about where our budget is, could we afford that? I made several comments that our goal was to eliminate the income tax as a whole and the first step was to get it off pensions.” Jetton’s original proposal to eliminate the state income tax on Social Security benefits would cost the state around $105 million. Including those not in the Social Security system, such as teachers, would increase the costs by at least $60 million. Jetton says the state needs to attract retirees and eliminating the state tax on Social Security benefits would go a long way towards doing that. Not everyone supports the move. Tom Kruckemeyer, the chief economist with the Missouri Budget Project, says an expected surplus this year can easily turn into a deficit next year. He also argues that any tax cuts should be more specifically targeted to those who need it, saying that “The fact of the matter is that the vast majority of this, the benefit from this tax, would go to, as we say, relatively affluent people.” Another critic says the legislature shouldn’t give away a surplus created by past budget cuts.(Jetton’s bill is HB 444)

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HB 444

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