A proposal to overhaul Missouri’s tax code is awaiting another vote in the Missouri Senate.
The bill approved on Wednesday would cut state income taxes to 5.25 percent for both individuals and corporations, starting next year. The state income tax rate is currently 5.9 percent for individuals and 6.25 percent for corporations.
“This would be the largest tax cut in the history of the state of Missouri,” said Sen. Bill Eigel, R-Weldon Spring, the bill’s sponsor. “What we’re doing to make sure that we don’t have a lot of hits to our short-term budget is that we’ve got a lot of mechanisms that are paying for a lot of these cuts.
For example, he said, “we’re reforming some of our corporate tax code.”
The bill also would raise Missouri’s fuel tax by 10 cents a gallon to pay for transportation improvements.
“That’ll provide about $2.5 billion for infrastructure spending in the state that we don’t have right now, for all the roads and bridges that are connecting our communities and connecting people to one another,” Eigel said. “Those two issues, tax reform and infrastructure spending, have been some of the most high profile needs that my constituents have talked to me about since I arrived in the Senate about a year ago.”
But not everyone’s on board. Senate President Pro-tem Ron Richard, R-Joplin, has reservations because the legislature passed another tax cut four years ago.
“We’re still trying to figure out the effect of that on the budget, [and] we’ve got a tax cut from Washington D.C. that we’re still feeling the effects of,” he told reporters Thursday. “I’d like to leave the state of Missouri in the position where they can actually have enough money to do business.”
Eigel’s bill needs another vote by the full Senate before moving to the House, which has its own tax proposal. That version would raise money for roads and bridges by increasing fees on license plates and vehicle registration instead of a fuel tax hike. It would also lower Missouri’s state income tax to five percent for individuals and corporations.
Gov. Eric Greitens, meanwhile, has rolled out his own tax cut plan. It would lower income taxes to 5.3 percent for individuals and to 4.25 percent for corporations, but would not raise Missouri’s fuel tax.
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