Senate Passes Income Tax Cut and Sales Tax Hike

5 years 7 months 5 days ago Tuesday, March 12 2013 Mar 12, 2013 Tuesday, March 12, 2013 5:45:00 PM CDT March 12, 2013 in News
By: Garrett Bergquist

JEFFERSON CITY - Nearly two hours of contentious debate Tuesday afternoon ended in a party-line vote to cut the state income tax and raise the sales tax.

The bill does the following over five years:

  • Cuts the individual income tax by 0.75 percent and creates a deduction for business income
  • Cuts the corporate income tax by 0.75 percent and exempts the first $25,000 of corporate income from taxation
  • Increases the state sales tax by 0.5 percent, to 4.5 percent
  • Increases the income tax exemption to $4100 for people with an adjusted gross income of less than $20,000


Sen. Jolie Justus, D-Kansas City, called the bill dangerous, saying the bill's sales tax increase will add up when combined with other sales taxes under consideration at the city, county and state level. Justus cited the sales tax for transportation infrastructure debated Tuesday morning as an example of a sales tax that would compound the bill's effects.

Sen. Eric Schmitt, R-Glendale, said the tax bill would reduce the tax burden on ordinary Missourians. He called the bill "the first step leading to a greater path for prosperity."

Sen. Jason Holsman, D-Kansas City, disagreed, saying the bill "shifts the burden from those that can afford it to those that cannot." Holsman said the bill would increase the burden on the poor while reducing general revenue, citing a fiscal note stating revenue would decline by between $400 million and $600 million.

Asked how the tax bill would affect the budget process, Appropriations Committee Chair Sen. Kurt Schaefer, R-Columbia, said general revenue would decline, but insisted his committee would be able to balance the budget.

"I do not believe Missourians are undertaxed," Schaefer said.

 

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