A proposed tax cut is once again moving forward in the Missouri Senate after it was rewritten yet again. The bill had stalled after its sponsor, Republican Will Kraus of Lee’s Summit, offered a substitute that conformed to conditions that Democratic Governor Jay Nixon said were necessary for him to sign it.
Missouri senators have endorsed an income tax cut that could eventually waive an estimated $464 million a year in state revenues.
The legislation given initial approval Wednesday would cut taxes by half of the amount originally proposed by a Republican-led committee. It could gradually cut the state's top individual income tax rate to 5 and a half percent from the current 6 percent.
It also could phase in a 25 percent deduction for business income reported on individual income tax returns, and add a $500 tax deduction for lower-income individuals.
Gov. Jay Nixon continued stumping across the state discouraging state lawmakers from overriding his veto on a tax cut bill.
At the University of Missouri Columbia campus Wednesday, Nixon said the bill could result in a funding slash of $67 million per year for the state’s higher education institutions. The University of Missouri system alone stands to lose $31 million per year. And if a federal online sales tax bill passes, the state number jumps up to a cut of $116 million annually.
Republicans in the Missouri Senate have scaled back a proposal to cut state taxes in order to emulate tax cuts in neighboring Kansas and Oklahoma.
Governor Jay Nixon (D) has strongly objected to the bill's sales tax hike, saying it would hurt the poor and elderly the most. That provision has been dropped. House Bill 253 would now cut the personal income tax rate by half a percentage point and the corporate rate by three points, and phase them both in over the next 10 years. Republican Will Kraus of Lee’s Summit is handling the measure in the Senate.