This week on the House floor the merits of reducing the tax burden for Missouri families and businesses was discussed. The House passed two bills – one focused on lowering the tax burden for Missouri businesses and the other on cutting taxes for both Missouri citizens and employers. The first bill (HB 1253) would implement a 50 percent deduction for business income. It also would cut corporate income tax from 6.25 percent to 3.125 percent over a period of five years. In order for these tax savings to be phased in, state revenues would have to remain above the level they were at in 2012. The bill would reduce the tax burden on Missouri businesses by nearly $350 million per year.
The second bill (HB 1295) implements a reduction of the individual income tax rate from 6 percent to 5.3 percent over a period of seven years. It also increases the current deduction for individuals who earn less than $20,000 annually from $2,100 to $3,100. The bill also includes the business income tax deduction. To protect education funding, the legislation also requires revenues to increase by $150 million annually. In addition, the bill specifies that of the revenue increase, $60 million would go to public schools and $30 million to higher education in each year. The bill is estimated to produce a tax savings for Missourians of more than $700 million annually.
At this point there are a number of differences to work out, but the key difference between this year and last is that the governor is now working with the legislature to find common ground. Over the next several weeks we will see how the talks evolve and whether both sides can come together to support tax cut reform. In the meantime I am interested to hear from you on this issue. Is a tax cut the right path for our state? Or are you happy with the current tax burden we have here in Missouri? As always, I am eager to hear your thoughts.
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As always, I appreciate hearing about your comments, opinions and concerns regarding legislative matters and state government. My phone number is 573-751-5912. You may also write me at: “Shelley Keeney; Missouri House of Representatives; State Capitol, Room 313-1; Jefferson City, MO 65101-6806.