It has been over ninety years since Missouri's tax payers were given a break on their tax bill. In fact, because of inflation, Missouri taxpayers are today paying an equivalent of more than $2 billion in additional revenues, meaning they've actually been exposed to a hidden tax increase over the years. Fortunately, two proposals in Missouri are working in concert to address these issues.
Senate Bill 509, which is being handled by Representative Andrew Koenig in the House and passed on Wednesday, will reduce the maximum tax rate by one half of a percent in annual 10 percent portions. It will also increase the deduction that is allowed for small businesses which file as individuals to 25 percent, meaning you can exempt 25 percent of your small businesses income from your earnings. Over time, this will return hundreds of millions to taxpayers -- money which they can keep in the bank, reinvest in their businesses, or use otherwise as they see fit.
"Once again the governor has made it clear that he is a tax and spend bureaucrat who would prefer to grow the size of government rather than invest in the families and businesses of this state. While the members of the General Assembly simply want hard-working Missourians to keep more of their hard earned paychecks, the governor continues to use false rhetoric and politically motivated deceptions to paint the first cut to our income tax in nearly a century as an attack on public education."
"The truth is that my colleagues and I in the legislature have taken education funding to record levels and will continue to do so even as we look for ways to allow Missourians to keep more of their wages. We know that a tax cut will spur the kind of job creation and economic growth that will result in increased revenues and even more funding for our public schools. If the governor wants to continue to work against this pro-growth plan that has worked in so many other states, the legislature will stand ready to defend Missouri taxpayers." Speaker Timothy Jones
Likewise, Representative Paul Curtman filed House Bill 1268, which recently was considered by the Senate Committee on Ways and Means. This proposal would adjust Missouri's tax brackets for inflation. Over time, as the value of a dollar has decreased and inflation has crept upwards, many Missourians who would've been considered wealthy by the standard of making $9,000 per year in the 30's are now not so fortunate. But, they still pay the highest tax rate in our state because our top bracket begins at $9,000 and has never changed. Going forward, Curtman's proposal would require the brackets keep pace with inflation thereby removing the silent tax that has been in effect.
Similar legislation was debated and a tax cut proposal passed last year but was vetoed by the Governor. In his arguments, he pitted those who valued tax reform against the public education industry claiming you could be for only one but not both. The left's claim that allowing income earners to keep a larger portion of their money is bad for education is simply wrong-headed.
Economics and history both show us that when we reduce the burden of taxation from the private sector we improve the rate at which it flourishes. This will ultimately have a net positive effect on government revenues. Furthermore, the proposal that Representative Koenig has before the body will only reduce the rates if Missouri sees an increase in state revenues of $150 million, guaranteeing certainty for Missouri's educators.
These are two common-sense reform proposals that your Missouri Republican-led House has debated and given the stamp of approval. SB 509 is now in the Governors hands. Does he support small business? We shall see.
As we are approach this Easter weekend, we hope you are able to relax with family and friends and enjoy the lovely spring weather. Easter is a wonderful time for family meals, Easter egg hunts, and is an opportunity to reflect on our many blessings. As you reflect on the sacrifice that made the hope of Easter a reality, let this be a time for your own renewal. Renew your heart, renew your hope, renew your faith -- Have a happy Easter!
Never hesitate to contact me at Dave.Muntzel@house.mo.gov or June Cardwell, my Legislative Assistant at June.Cardwell@house.mo.gov or call 573 751-0169 with your concerns or help with personal or business needs.