Income tax

Missouri Senate committee negotiates income tax cut

JEFFERSON CITY, Mo. — Missouri state senators offered two strategies Monday to cut income taxes, but behind-the-scenes negotiations were still ongoing.

The Senate Appropriations Committee passed two income tax bills for the entire Republican-led chamber to debate.

The first mirrors what Republican Gov. Mike Parson instructed lawmakers to pass when he called them back for a special session. Typically, Missouri legislators only work from January to mid-May.

In its special session call, Parson ordered lawmakers to cut the top tax rate from 5.3% to 4.8%, as well as increase the standard deduction by $2,000 for single filers and $4,000 for single filers. couples. He limited tax cuts to a maximum price of $700 million a year.

The committee sent a draft law containing these provisions to the prosecution without making any changes.

An alternative plan would reduce state income tax to 5%, plus an additional 0.1% per year if the state meets the revenue growth criteria until the rate reaches 4.5%.

Revenue growth thresholds would be tied to inflation, a departure from Parson’s original plan.

The legislation, sponsored by Republican Senators Lincoln Hough and Andrew Koenig, would also eliminate the lower tax bracket. Hough said he was still working behind the scenes to reach a compromise.

The Missouri Chapter of Americans for Prosperity and Associated Industries of Missouri supported Parson’s plan and the alternative Senate bill during a committee hearing on Monday.

But Missouri AARP Advocacy Director Jay Hardenbrook said the tax cuts will leave out seniors, primarily because they no longer pay income taxes. He urged lawmakers to take action to protect seniors on fixed incomes from future property tax hikes that could force them out of their homes.

“None of these proposals really contemplate addressing the impending property tax crisis that I believe will occur when reassessments are made next year,” Hardenbrook said.

Senators on Monday scrapped the idea of ​​offering one-time refunds to taxpayers this year, opting instead for long-term income tax cuts. Nor did the committee put forward any proposals to eliminate the corporate income tax.

Committee members also opted to advance high-priority farm-related tax credits in a separate bill instead of bundling them with any proposed income tax cuts.

Missouri state senators on Monday proposed two strategies to cut income taxes, but behind-the-scenes negotiations were still ongoing.

The Senate Appropriations Committee passed two income tax bills for the entire Republican-led chamber to debate.

The first mirrors what Republican Gov. Mike Parson instructed lawmakers to pass when he called them back for a special session. Typically, Missouri legislators only work from January to mid-May.

In its special session call, Parson ordered lawmakers to cut the top tax rate from 5.3% to 4.8%, as well as increase the standard deduction by $2,000 for single filers and $4,000 for single filers. pairs. He limited tax cuts to a maximum price of $700 million a year.

The committee sent a draft law containing these provisions to the prosecution without making any changes.

An alternative plan would reduce state income tax to 5%, plus an additional 0.1% per year if the state meets the revenue growth criteria until the rate reaches 4.5%.

Revenue growth thresholds would be tied to inflation, a departure from Parson’s original plan.

The legislation, sponsored by Republican Senators Lincoln Hough and Andrew Koenig, would also eliminate the lower tax bracket. Hough said he was still working behind the scenes to reach a compromise.

The Missouri Chapter of Americans for Prosperity and Associated Industries of Missouri supported Parson’s plan and the alternative Senate bill during a committee hearing on Monday.

But Missouri AARP Advocacy Director Jay Hardenbrook said the tax cuts will leave out seniors, primarily because they no longer pay income taxes. He urged lawmakers to take action to protect seniors on fixed incomes from future property tax hikes that could force them out of their homes.

“None of these proposals really contemplate addressing the impending property tax crisis that I believe will occur when reassessments are made next year,” Hardenbrook said.

Senators on Monday scrapped the idea of ​​offering one-time refunds to taxpayers this year, opting instead for long-term income tax cuts. Nor did the committee put forward any proposals to eliminate the corporate income tax.

Committee members also opted to advance high-priority farm-related tax credits in a separate bill instead of bundling them with any proposed income tax cuts.