A $1 billion income tax cut plan is headed to Gov. Mike Parson for a decision.
Parson called the Missouri Legislature back to the Capitol for a special session to pass an income tax cut.
The Missouri House of Representatives passed the Senate package today that would gradually reduce the income tax rate from the current 5.3% to 4.5% over several years – if Missouri makes enough money. The legislation would also get rid of the lowest tax bracket for those who earn less than $14,000 annually, which means they would not owe income taxes.
State Senators Lincoln Hough, R-Springfield, and Andrew Koenig, R-Manchester, sponsored the effort.
“With the final passage of Senate Bills 3 & 5, Missourians will be able to keep more of their hard-earned tax dollars where they belong — in their pocketbook. In addition to immediately easing the burden of near-record inflation and providing the largest income tax cut in state history, this legislation establishes a fiscally-responsible blueprint that will continue to provide tax relief to hardworking Missourians for years to come,” said Hough.
The ranking Democrat on the House Budget Committee, St. Louis Representative Peter Merideth, says the plan will help the rich.
“Almost a third of Missourians don’t make enough money to get a penny from this. And of those that do, the bottom 20%, they’ll average about $10 each. Meanwhile, the top 1% – those billionaires pushing this bill, well they’ll average more like 10 or $15,000 a year,” said Merideth.
House Budget Committee Chairman Cody Smith, R-Carthage, takes issue with that statement.
“Low taxation leads to economic prosperity,” said Smith. “High income earners can pay their tax bill and they don’t really think about it as much. The people that it really affects are those working families that have oftentimes been left out.”
Smith said the state has done more for low-income Missourians than it ever has. Representative Joe Adams, D-University, questions how that can be the case.
“When we have one of the highest infant mortality rates in the nation, even pretty close to the world, we’re worse than some third world countries. And I’m not talking about the urban areas here in the state of Missouri. I’m talking about places like the Bootheel,” he said. “We have the highest maternity death rate in the nation – and we’re taking care of poor people?”
State Representative Doug Richey, R-Excelsior Springs, backs the plan.
“I’ve heard from people who are saying that they want a tax cut no matter how much that ends up reflecting in their paycheck because for the state to take even a quarter more than what we should be is a problem,” he said.
Fellow Republican Representative, Bill Kidd of Buckner, says he’s disappointed in the effort.
“We took a small bite this time but income tax is really not necessarily the issue, at least not in my part of the country – not in Jackson County. What we have a problem with property tax and personal property tax. If you really want to affect people’s income, do something about property tax,” he said.
The House stripped off changes added Wednesday by the House Budget Committee, which would have eventually eliminated the corporate income tax, given adoption tax credits as well as a tax cut on diapers and feminine hygiene products.
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