Bill would make income tax go down, sales tax go up
Thu, 25 Apr 2013 00:26:52 GMT —
The Missouri House has passed legislation that would trim the state's income tax and raise the sales tax as part of an economic competition with Kansas and other neighboring states.
The SB26 approved 90-68 on Wednesday would represent the most significant change to Missouri's tax code in at least a couple of decades. It now returns to the Senate, which passed a different version earlier this year.
Under the House plan, the top individual income tax rate would be cut by two-thirds of a percentage point over five years, so long as state revenues continue to rise by $100 million annually. Business taxes also would be cut. The sales tax would be gradually increased by three-fifths of a cent, with revenues earmarked to schools, a new mental hospital and roads.
The Missouri Chamber of Commerce says the bill will free up nearly $1 billion for job creation and expansion.
"Lawmakers are cutting the costs of doing business and it is making Missouri a better place to live and work," said Missouri Chamber President and CEO Daniel P. Mehan. "They have taken a bold step, initiating the largest tax cut for Missouri businesses in history. Lawmakers have sent a strong message to our employers: We believe that growing jobs will grow our economy and we are willing to back that claim with real tax relief."
The Chamber points out that during floor debate, supporters of the bill pointed to states like Kansas, Oklahoma and Tennessee that are outpacing Missouri in job growth.
"The states that are doing the right thing are the states that are expanding, states that don't tax productivity," said Mehan.
The bill now moves to the Senate for approval.