In this week's highlight of the First Session of the 97th General Assembly we will take a detailed look at some legislation concerning your pocketbook.
Incentivizing Charitable Contributions:
One of the first pieces of legislation to be signed by the Governor this session was SB 20, which extends the sunset on several benevolent tax credits. Benevolent tax credits include such organizations as Children in Crisis, Pregnancy Resources Centers, Residential Dwelling Accessibility, and Public Safety Officer Surviving Spouse tax credit programs, as well as donations to food pantries.
These programs were designed to give individuals an incentive to make their communities a better place. For more information on how to claim tax credits, visit http://dor.mo.gov/taxcredit at the Department of Revenue website.
Relieving Tax Burdens:
First of all, it seems that a lot of misinformation is floating around concerning HB 253 (Broad-Based Tax Relief Act of 2013). It is not a drastic tax cut. Here are the most prominent features:
--reduces personal, business, and corporate income taxes. This piece of legislation will reduce the personal income tax from 6% to 5.5% over a ten-year period, and the corporate income tax from the current 6.25% to 3.75% over five years;
--reductions are incremental and do not become effective until at least $100 million has been added to the total revenue of the state; and
--the definition of use tax is modified to collect sales tax from out-of-state transactions (additional revenue after fixing the large gaps created after Court changes).
These are the most important features of the bill. This is not a blind, across-the-board tax cut that will adversely affect the state budget. It is measured and attempts to fix some problems with the collection of sales/use tax.
I caution you to keep in mind that the total revenue increase per year of the state is restricted by Hancock provisions, and this bill addresses the issue. As total revenue rises, the rate reductions are applied incrementally. I believe this is a better solution than that used in the late 1990s when we had the administratively expensive tax refunds after revenues exceeded the Hancock limit. In short, this bill is a measured and reasonable way to proceed with tax reform in the future.
Fixing the Second Injury Fund:
For several years, the Missouri Second Injury Fund has been a growing disaster, compromising the entire workers' compensation system. The Second Injury Fund compensates injured employees when a current work-related injury combines with a prior disability to create an increased combined disability. This fund was created to provide a living for people who became totally disabled due to the risks of their job. But, over time the list of qualifying injuries became too long. Today, because so many people qualify for additional benefits, those who are eligible for regular workers' compensation are unable to collect their checks. Governor Nixon called on the legislature to fix the Second Injury Fund and we took action. This year, Republicans and Democrats collaborated to do the right thing for workers and businesses.
SB 1, narrows the list of injuries that qualify for compensation from the Second Injury Fund and provides a means of raising money for the fund.
In order to qualify for payments from the Second Injury Fund, a worker must have a documented permanent disability that resulted directly from active military duty or from a compensable work-related injury. Or else the pre-existing condition may be the permanent partial disability of an extremity (such as an arm or leg), eye, or ear. Then to qualify for the Second Injury Fund, one must lose use of the opposite limb, eye, or ear. Back injuries acquired over long periods of time will no longer count on the Second Injury Fund, although they can still be covered by workers' compensation. Also as part of this law, the fund will not cover employees of uninsured workplaces. This is an incentive for businesses to join, and results in a larger source of funding. The business community has agreed this is a necessary fix to a very damaging problem. These changes will move the fund back to solvency.
The 2013 Second Injury Fund fix is a common-sense solution. By narrowing the qualifying diseases and requiring more employers to pay in, the General Assembly is doing the economically smart and the fair thing for the business owners and workers of this state.
This week's highlight of the First Session of the 97th General Assembly takes a detailed look at some legislation that secures our fundamental rights.
Serving the Constituents of the 51st District,
State Representative Dean Dohrman.