The anti-taxers are at it again in Missouri. The House and Senate for the second time in as many years passed a bill that would lower taxes on the wealthiest Missourians and reduce taxes on business income.
Fully aware Missouri Gov. Jay Nixon doesn’t support these irresponsible cuts, the Republican lawmakers behind this plan aren’t resting on their laurels; they’re working to drum up enough support to override an anticipated veto.
This tax cut package (Senate Bill 509) would eliminate the state’s top income tax bracket and introduce a 25 percent deduction for business income; It also includes a token exemption for low-income Missourians. A Missouri Budget Project report, using data from our partners at the Institute on Taxation and Economic Policy (ITEP), found that the poorest 20 percent of Missourians would see a tax cut of just $6 while the top one percent of families would see an average tax cut of $7,792.
Interestingly, at least one legal expert notes the bill’s language may be fatally flawed by not just eliminating the top tax bracket (which starts at $9,000), but actually doing away with taxes on income over $9,000. Such a drafting error would effectively end the state’s income tax. It would also balloon the bill’s price tag from $620 million to $4.8 billion.
The Governor hasn’t yet vetoed the bill and is instead allowing time for more administrative review. But his feelings on the bill are pretty clear. In a statement released Tuesday he said, “With the simple stroke of my pen, this bill would separate Missouri from every state in the nation – as the only one unable to meet even the most basic obligations to its people.”
This isn’t the first time Missouri legislators have tried to give the wealthy a tax break at the expense of everyone else. In 2013, Gov. Nixon vetoed a regressive tax cut package passed by Republican lawmakers that would have cost the state $700 million annually. In his veto message the Governor called the legislation an “ill-conceived, fiscally irresponsible experiment that would inject far-reaching uncertainty into our economy, undermine our state’s fiscal health and jeopardize basic funding for education and vital public services.”
Last year, in a victory for tax justice advocates, his veto withstood an attempted override by the legislature. Stay tuned as this debate over bill language, state funding, and fairness play out once again.