income tax cuts

Democratic Gov. Laura Kelly vetoed a plan for hundreds of millions of dollars in tax relief over her objection to a dramatic shift to a flat income tax rate. But her veto also halts two tax-relief proposals she championed.

The Kansas Legislature recently approved a tax plan that sets a 5.15% income tax rate for almost all Kansans. Critics argue the plan mostly benefits the richest Kansans while also putting the state’s revenue stream in peril.

The House tax package slims down the cost to the state to roughly $500 million a year while providing relief in several different areas. The plan competes with the Senate’s proposals that would reduce state revenue by more than $1 billion.

The bill would also lower income taxes and remove taxes on Social Security benefits, which both parties say could be helpful to seniors in the state.

The GOP bill would cut Missouri's corporate income tax rate in half, cut the top rate on personal income taxes, and exempt Social Security payments from taxation. Democrats, however, said another cut — coming on top of a tax cut approved in September that has not been fully implemented — would put the state into a potentially precarious financial position.

The Kansas Senate has passed several GOP-backed bills that would lower the state’s tax revenue by more than a billion dollars. But Democratic Gov. Laura Kelly has already expressed skepticism.

Independent analysis from the Missouri Budget Project found that, by the time the state's new tax plan is fully in place, the middle 20% of earners would save just $131 a yea on average, while the top 1% would be saving over $9,500.

The governor called lawmakers back into a special session to pass legislation that cuts Missouri's income tax from 5.4% to 4.95%. It would bring the rate down even more if certain general revenue targets are met.

The legislation decreases the top rate to just under 5% and sets the stage for further reductions. The cut was one of the goals of the special session Parson called.

Gov. Mike Parson wanted a starting date of Sept. 6 for a special session on an income tax cut and agriculture tax credits. However, Republican leadership in a joint statement said they intend to use this week for further negotiations.

Missouri Gov. Mike Parson has called a special legislative session for Sept. 6th that will focus on passing $700 million in income tax cuts along with a group of agricultural tax credit programs.

Parson’s announcement comes after he vetoed a bill Friday authorizing a one-time, nonrefundable tax credit. On Thursday, he vetoed the $500 million allocated for the credit, foreshadowing a rejection of the credit itself.