While he complimented lawmakers for increasing funding for K-12 schools and higher education, he also criticized them for passing legislation that would cut state income tax rates for individuals and corporations. He told reporters that the bill would gut state revenues by more than $800 million.
Republicans in the Missouri Senate have scaled back a proposal to cut state taxes in order to emulate tax cuts in neighboring Kansas and Oklahoma.
Governor Jay Nixon (D) has strongly objected to the bill's sales tax hike, saying it would hurt the poor and elderly the most. That provision has been dropped. House Bill 253 would now cut the personal income tax rate by half a percentage point and the corporate rate by three points, and phase them both in over the next 10 years. Republican Will Kraus of Lee’s Summit is handling the measure in the Senate.
The Missouri Senate has given first-round approval to a phased-in tax overhaul designed to help the Show-Me State compete with neighboring Kansas, which recently slashed its tax rates.
Senate Bill 26 would lower state income taxes for individuals and corporations by three-quarters of a percentage point while raising the state sales tax by half a point. Both would be phased in over a five-year period. State Senator Will Kraus (R, Lee’s Summit) says it would result in a revenue loss of around $450 million a year.
Missouri's response to last year's big tax cuts in neighboring Kansas could carry a $1.1 billion price tag.
A Missouri Senate committee on Monday endorsed a proposal to cut the state's individual and corporate income tax rates by 1.5 percentage points. The individual rate would fall to 4.5 percent, and the corporate rate to 4.75 percent.
Senate Republicans are looking to respond to Kansas' tax cuts, which they say have caused businesses to move from Missouri across the border.
Often tax legislation is a little bit muddled. We try to break down Obama's latest for you and let you know what your U.S. Senators, Kit Bond and Claire McCaskill, think as they go to vote on the bill.