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The national tax overhaul of last year implemented significant tax cuts for private citizens and corporate entities alike. Not to be outdone, Missouri governor Eric Greitens has announced a plan to slash tax rates statewide. If the governor’s proposal is successful, Missouri taxes could be reduced by an estimated $800 million.
Governor Greitens outlined his new tax proposal in a speech on Monday in St. Louis. Flanked by Republican representatives Tim Remole of Excello and Craig Redmon of Canton, the governor revealed the details of his intended overhaul.
The proposed tax plan
Under the proposed legislation, the income tax rate for Missouri’s highest earners would be reduced by 10 percent. Corporate income tax would be cut to two-thirds its current rate. The plan would cut taxes for all taxpayers who have an income over $9,092. In addition, a non-refundable tax credit would be implemented for low-income workers; Greitens insists that this would eliminate income taxes for approximately 380,000 working-class Missourians.
Reaction to the new proposal
Support for the tax plan has fallen along party lines, with state Republicans praising it and state Democrats denouncing it. One surprising critic is the Missouri Retailers Association, which claims that the proposal, while purportedly business-friendly, will hurt small businesses by removing a discount that they receive for collecting sales tax. On the other hand, surprise support for the bill comes from The Missouri Budget Project, which has been critical of Governor Greitens’s legislation in the past.
The severity of the tax cuts has left many of its opponents wondering how the state’s tax revenue will be affected. The director of the Missouri Department of Revenue has stated that the proposal is meant to be revenue-neutral and will not prompt budget cuts.
Other tax legislation
There are currently two other Republican-sponsored tax proposals in the Missouri Senate. One bill proposes to reduce the corporate tax rate by two percent. The other would eliminate taxes for taxpayers in the lowest bracket and reduce the tax rate for those in the highest. Both plans appear to be compatible with the governor’s recently proposed legislation.