The Missouri General Assembly passed the first state income tax reduction in nearly 100 years when they Truly Agreed and Finally Passed House Bill (HB) 253! Now, they are one vote away from taking the largest step they can to improve Missouri’s competitiveness and economy.
Senator Eric Schmitt did a great job of describing what HB 253 really does and means to the state. Listen to his discussion here.
We know reducing income tax rates produce more revenue for governments not less as the naysayers want to claim. The federal government saw increased revenues when President Kennedy reduced tax rates. It happened again when President Reagan reduced them too. But it just doesn’t happen at the national level.
Oklahoma cut it’s income tax rates and saw an increase in state revenues although decreases were projected by the “system” and opponents. Oklahoma has done so well they passed a bill to further reduce their income tax rates.
Kansas passed a comprehensive tax cut last year. There were some games being played and the bill that passed didn’t include all the “paid for’s” proposed by Governor Brownback. However, even without those measures, Kansas saw an increase in state revenue – not a decrease as the opponents projected.
This legislative session, the Kansas legislature came back and passed some of those “paid for’s” as well as made other adjustments including phasing in a further reduction in income tax rates. The Governor has signed the legislation.
Missouri is falling farther and farther behind our neighboring states. Big government spenders like Governor Nixon and others like the Civic Council of Kansas City (many members of which live in Kansas and not Missouri) support more of the same. They support letting the state keep more of our hard earned money and not giving it back to hard working Missourians.
The Civic Council of Kansas City should change their name to a more appropriate title like the “Crony Capitalists of Kansas City”. The members of that organization are among the largest recipients of corporate welfare in the state. It’s no wonder they want the state to keep more of our money – their corporate welfare could come under more attack if that were to happen!
Big government spenders don’t support letting Missourians keep more of our hard earned money because they really believe that government can spend our money better than we can. They are out of touch but unfortunately, not out of influence with the Governor!
Missouri has one of the most regressive income tax systems in the country. HB 253 provides a tax cut for EVERY Missourian who pays state income taxes. You may hear the old class warfare arguments trotted out yet once again. Don’t believe them because they simply are not true.
Missouri’s top income tax rate of 6% goes into affect at the whopping income level of $9,000. A Missourian working full-time making minimum wage will be subjected to this maximum rate. They will not usually itemize their deductions. They will usually take the standard deduction.
HB 253 not only provides a tax cut for every Missourian who makes over $9,000 but it provides an additional deduction for those having an adjusted gross income (AGI) of $20,000 or less. Those reporting that AGI will receive and additional $1,000 deduction toward their income tax liability. So, not only do they receive a reduction in income tax withholding, they also get an additional deduction!
Their are also business reductions in HB 253. Big corporations will get a 3% reduction in their corporate taxes. But the biggest and most effective tax cut is for the mom and pop businesses, the small business owners in our state.
Small businesses create and maintain most of our jobs in the state. These small businesses are usually operating on small margins. They are often falsely accused of being the “rich” because their business income is reported on their personal income tax returns. It’s a false measure but when the opponents are more interested in deception rather than telling the truth they use this inaccurate measure.
HB 253 will reduce the amount of taxable income for these job creators by 50% over 5 years. That will allow these small businesses to keep more of their money to re-invest in more inventory, expanding jobs and other economic creating activities. This will do more for Missouri’s economy than any tax credit has ever done!
If you listen to the big government spenders you would think the world was coming to an end with HB 253. Of course they are out of touch and concerned about their own fiefdoms and not Missouri tax payers.
HB 253 contains triggers for the individual income tax and corporate reductions. Over a 10 year period, the state general revenue has to grow by at least $1 billion in order for those reduction to be triggered.
So when you hear that the education and healthcare or other state services will be impacted by HB 253, just consider the source. They likely have something to be gained or protecting their ability to dip into your pockets via state programs.