Analysis: Mo. business tax break has wide reach

Apr 21, 2014

Jay Nixon
Credit File Photo / KBIA

A tax-cut bill pending before Missouri Governor Jay Nixon would create a special deduction for thousands of business owners.

Nixon has criticized the measure as a giveaway to lawyers and lobbyists. But that may be oversimplifying the issue.

The legislation would phase in a 25 percent deduction for business income reported on personal tax returns. Many lawyers and lobbyists would benefit because of the way their businesses are structured.

But so would the overwhelming majority of Missouri businesses. The tax break also would benefit many local restaurant and retail stores, doctors, accountants, landscapers, car dealers, construction companies and others.

Business associations that support the tax deduction say it's the best way to provide tax relief to employers. But some economists have questioned its effectiveness and fairness.