Tax Cuts
5:44 pm
Tue April 2, 2013

House Committee Hears Mo. Senate Bill To Cut Income Tax & Raise Sales Tax

Legislation that would cut Missouri’s income tax while raising the sales tax was examined today by a State House committee.

Senate Bill 26's backers are focusing their attention on Kansas, where lawmakers last year made deep cuts to that state's income tax rates.  State Senator Will Kraus (R, Lee’s Summit), the bill’s sponsor, says Kansas is specifically targeting businesses in Missouri with a tax-friendlier environment.

“As leases come up, Missouri businesses are gonna look at the tax advantages and the incentives that Kansas is offering and potentially jump the border, and particularly in my neck of the region, in Kansas City," Kraus told the House Committee on Ways and Means.  "The impact to our state is gonna be the loss of revenue and the loss of jobs.”

Opponents include Lee’s Summit Schools (R-7) Superintendent David McGehee.  He says Missouri is in no financial condition to voluntarily give up revenues.

“Missouri’s funding for public schools is already more than $600 million below what is required to fund its own foundation formula, with no real plan in sight to ever see full funding,” McGehee said.

In addition, the Missouri Budget Project, a St. Louis-based non-profit group that advocates for the poor, has launched an ad campaign saying the proposal could cost the state nearly a billion dollars.  Kraus called the ads “misleading," "disappointing," "disrespectful," and "distasteful."  He says Missouri's drop in revenues would only be around $477 million over five years’ time, compared to the $1.8 billion in one year cut by Kansas.

The measure has already cleared the Missouri Senate.  The House Ways and Means Committee is expected to vote on the bill later.

Follow Marshall Griffin on Twitter:  @MarshallGReport