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Gov. Eric Greitens announced in late May that he would resign after facing months of political and legal scandals.The saga started in January, when KMOV released a recording of a woman saying Greitens took a compromising photo of her during a sexual encounter and threatened to blackmail her.A St. Louis grand jury indicted Greitens in February on felony invasion of privacy. The woman testified to lawmakers that Greitens sexually and physically abused her, spurring bipartisan calls for his resignation or impeachment.The invasion of privacy charge was eventually dropped by St. Louis Circuit Attorney’s office following a series of prosecutorial missteps before the trial began. Greitens was also accused of illegally obtaining a donor list from the veterans non-profit he co-founded with his political campaign, but that charge, too, was dismissed as part a deal that led to his resignation as governor.

Greitens reveals more details of tax proposal as lawmakers mull their options

Gov. Eric Greitens sits down for an interview with St. Louis Public Radio in downtown St. Louis on July 17, 2017.
File photo | Carolina Hidalgo | St. Louis Public Radio
Gov. Eric Greitens sits down for an interview with St. Louis Public Radio in downtown St. Louis on July 17, 2017.

Missouri Gov. Eric Greitens is unveiling more details of his tax overhaul, which seeks to pair income and business tax cuts with paring down some popular tax breaks.

Greitens’ proposal would cut Missouri's income tax to 5.3 percent. Legislation that was passed in 2014 is already gradually reducing the state income tax to 5.5 percent. The proposal would also lower the corporate income tax from 6.25 percent to 4.25 percent. And it would institute an earned income tax credit for certain types of workers.

"This tax plan puts working families first, and it's a better deal for all Missourians because it rewards businesses for hiring people in Missouri," Greitens said in a statement.

Additionally, the governor's proposal would also eliminate a 2 percent discount businesses get for paying  their taxes on time. It would also pare down the state deduction on federal taxes and enter into a multi-state agreement to charge sales and use taxes for online retailers. Greitens spokesman Parker Briden said the proposal is “revenue neutral.”

“Businesses will see a lower rate and more favorable corporate tax environment,” Greitens' news release states. “At the same time, by eliminating special breaks and loopholes in Missouri's tax system, we can find alternative ways to ensure that Missouri's revenue stays steady. Rather than have a few businesses or corporations get a break, we should lower the rate for all Missouri taxpayers.”

(You can look at details of Greitens’ proposal by clicking here.)

Greitens’ plan does not include a gas tax increase, which is part of a proposal that Sen. Bill Eigel, R-St. Charles County, and Rep. Travis Fitzwater, R-Holts Summit, are sponsoring. A House-Senate commission recommended raising the gas and diesel tax in order to drum up more revenue for Missouri’s transportation system.

Reaction to the governor’s plan

The governor is spending Monday and Tuesday touring the state to promote his proposal. His desire to cut taxes was a central aspect of his State of the State address, which was largely overshadowed by the revelation that he had an extramarital affair. 

House Minority Leader Gail McCann Beatty, D-Kansas City, speaks during a news conference after the House adjourned on Wednesday.
Credit File photo I Tim Bommel I House Communications
House Minority Leader Gail McCann Beatty, D-Kansas City, questioned whether Greitens' proposal was actually "revenue neutral."

Joe Reagan of the St. Louis Regional Chamber said he was especially heartened by the earned income tax credit portion of the governor's plan.

“We strongly support Governor Greitens’ efforts to cut taxes for Missouri’s working families by creating a state Earned Income Tax Credit," Reagan said in a statement. "The EITC will help pave the road out of poverty for over 500,000 families across Missouri. The boost in income afforded by the EITC will be spent in local communities and lead to even more jobs in our state.”

Democratic lawmakers have been advocating for some parts of the Greitens plan for some time, including removing the 2 percent business discount and ratcheting down the federal tax deduction.

The Missouri Budget Project’s Amy Blouin, who has often been critical of the legislature’s bid to cut taxes, said in a statement she was “encouraged by many provisions of the Governor’s tax proposal and the opportunity it presents to comprehensively discuss Missouri’s tax policies.”

“We look forward to working with the legislature and the Governor to craft a tax reform bill that addresses these problems and truly benefits hard-working Missourians while also providing a more balanced approach to taxes,” Blouin said. “There are a handful of positive steps we can take within this tax proposal, like the [Earned Income Tax Credit], but also some provisions we believe are unnecessary and counterproductive. The Missouri Budget Project looks forward to seeing the legislation and conducting a full analysis when it is available"

House Minority Leader Gail McCann Beatty, D-Kansas City, said in a statement that lawmakers should be wary that the governor’s proposal would be “revenue neutral.” She also questioned the wisdom of pursuing tax cuts when the governor is proposing major budget cuts to higher education.

“Despite a strong economy and low unemployment, Missouri is enduring a second straight year of deep state budget cuts because Republicans put granting large tax cuts to their wealthy donors ahead of the financial stability of the state,” McCann Beatty said. “The governor’s proposal would only serve to make the state’s financial crisis far worse than it already is.”

Follow Jason on Twitter: @jrosenbaum

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