Republican tax reform bill aims to relief burden on taxpayers
Jefferson City - While the Republican Congress in Washington is working on a plan to overhaul the country's tax system, Missouri lawmakers are looking to make changes to their state's tax plan as well.
Sen. Bill Eigel, R-St. Charles County, pre-filed a new version of a tax reform bill called Missouri Economic Relief Act (MERA), or SB617.
The bill targets several issues that, according to Eigel, wouldn't pass individually.
"We've created a bill that is a big idea made up of several other big ideas. And the only way they work, is if they do so together," Eigel said.
Some of the issues addressed by the bill are:
- Income Taxes
- Sales Taxes
- Motor Fuel Taxes
- Low Income Housing Tax Credit
- Tax Credit Cap
Rep. Travis Fitzwater, R-Holts Summit, says he was immediately interested in supporting the bill.
"I think this is the best way to attract everybody to the table and say 'Hey, listen, you are getting your piece, lets do this smart approach to tax reform in a way that doesn't bust our budget, and that is intelligent that handles a broadening of the base but gives back Missouri taxpayers hard-earned dollars,'" Fitzwater said.
Missouri Democratic Party Spokesperson Sam Newton responded to the announcement via email, saying this bill does not provide anything new.
"This is just more of the same from the Republican establishment in Jefferson City: massive handouts to their millionaire and billionaire donors, while working families and senior continue to shoulder the cost of the GOP's deep healthcare cuts," Newton said.
The act would eliminate the top two and bottom four tax rates. The top remaining tax rate will be reduced to 4.8 percent for incomes over $7,000, and a bottom remaining tax rate of 3.5 percent for incomes over $5,000.
With sales taxes, the bill will repeal the current law that allows vendors to retain 2 percent of the amount of sales tax due to the state if they pay taxes on time.
The bill will also increase the rate of motor fuel tax from $0.17/gallon to $0.23/gallon, and implements a cap of $135 million on the amount of tax credits that may be authorized in a given fiscal year under the Missouri Low-Income Housing Tax Credit program.
Eigel says his goal is to help Missouri stand out.
"We are looking for way to make Missouri economically competitive with surrounding states," Eigel said.
Fitzwater said Missouri's budget shows record numbers and continues to grow, and that is why giving back to the citizens is key.
"In just a couple of years, we've increased that budget by a magnitude of 30, 40 percent. We really wanted to look at that and say 'How do we give relief to Missourians and insure that we are continuing to have this record numbers' without giving relief back to the citizens of Missouri," Fitzwater said.
He also said there will probably be modifications to the bill in the future.
"This is probably by no means the perfect bill that is going to get passed as it is. But we are going to have a long discussion about what this looks like," he said.
MERA will be presented during the second regular session of the General Assembly, which begins January 3, 2018.