The Missouri House has passed a Senate bill that would overhaul the state’s income and sales taxes, but not before making a few changes.
First, the sales tax hike would be six-tenths of a percentage point, slightly higher than the Senate’s half-a-point, and extra revenues would go toward roads, schools and a new state mental hospital at Fulton. The income tax cut is slightly smaller – two-thirds of a percentage point instead of three-fourths, and would only kick in if general revenues increase by $100 million. State Representative Jon Carpenter (D, Kansas City) says it’s still a bad bill.
"The idea that cutting the personal income tax from 6 (percent) to 5 and a third (percent) is gonna convince a whole bunch of people to move to Missouri, and invest and make their home here, is just…you know, I don’t think anybody here really believes that," Carpenter said.
The bill’s backers say it will help Missouri compete with Kansas and other neighboring states with friendlier tax climates. Andrew Koenig (R, Winchester) was the official House handler for the Senate bill.
"We happen to be surrounded by states like Oklahoma and Kansas and Tennessee, that are committed to reducing their income tax – or may not have an income tax at all," Koenig said. "If we want Missouri to remain competitive, we need to do the same – we need to reduce our income tax."
Democrats also argued that if the tax cut backfires and cripples Missouri’s economy that it would be very hard to reverse, because tax hikes of $90 million or more require voter approval. The bill now goes back to the Senate, which can either accept the changes and send the bill to Governor Jay Nixon (D), or reject them and negotiate a compromise with the House.
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