A Senate Committee has endorsed two proposals for a tax cut for individuals and small businesses that legislative staffers say would cost the state about $900-million a year if fully implemented.
The two bills would reduce personal income taxes from 6 to 5 percent over 10 years and grant a 50 percent deduction from small business owners over 5 years for business income reported as an individual. The cuts could begin next year if general revenue rises by 100-million over the highest total from the past three years.
The legislation would also give an additional $1,000 tax deduction to people with incomes under $20,000 regardless of whether state revenue continues to increase.
The bills’ sponsor, Senator Will Kraus (R-Lee’s Summit), says in a statement, “SB 509 & 496 is designed to take no money from existing programs, including education. Instead, it takes a portion of future revenue growth and returns it to Missouri residents. In other states, similar reasonable cuts have led to higher overall state revenues.”
Governor Jay Nixon (D) responded to the passage with a statement re-iterating that he would not sign anything that he thinks takes money away from schools. He tells legislators they must choose between cutting taxes or funding schools.