By Collin Reischman
JEFFERSON CITY, Mo. — Democrats have responded to Senate Bill 26, the Republican tax cut bill that moved through the Senate just before the legislative spring break.
Rep. Jon Carpenter, D-Kansas City, filed House Bill 864, the “Missouri Tax Modernization Act,” last week.
The bill aims to reduce the number of tax brackets throughout Missouri from 10 to four and changes the respective rates. Carpenter said that because tax rates have not been adjusted for inflation, Missourians making more than $9,000 per year pay the highest tax rate of 6 percent – the same as the State’s millionaires.
The new rates under HB 864 would be:
- 0-$25,000: 1 percent
- $25,000-$50,000: 4 percent
- $50,000-$500,000: 6 percent
- $500,000-plus: 8 percent
“Everyone making under $500,000 is going to get a tax cut, and that’s most Missourians,” Carpenter told The Missouri Times. “The typical family will get a real cut, instead of a marginal cut on top of a sales tax increase.”
Carpenter said the Republican plan, sponsored by Sen. Will Kraus, R-Kansas City, “barely” would change the tax rates for most Missouri families, but would give a major cut to the wealthiest earners.
The addition of a sales tax only creates additional burdens to low-income families, Carpenter said.
“Historically, low-income families spend more of their income on things that would fall under this sales tax,” Carpenter said. “I’m against going down the road of increasing taxes on our families before increasing them on the people with the most.”
Carpenter agreed tax cuts could stimulate the economy, but doubted the Republican tax plan would accomplish this goal.
“There is an economic multiplier to tax cuts,” Carpenter said. “But if you cut one dollar in taxes, you don’t get one dollar in economic activity. So I can’t see a tax cut for the richest people really benefitting the economy.”
The bill also would make the first $50,000 of income for Missouri businesses completely tax free, institute a higher cigarette sales tax and allow taxes to be collected on Internet sales.
The bill is largely symbolic of the philosophical differences between the two parties.
The Democrat plan, HB 864, would increase state revenue by approximately $400 million annually and likely increase the tax liability of some small businesses as well as the wealthiest individuals. The Republican counterpart, SB 26, would decrease state funds by approximately $700 million annually and largely cut the taxes of small businesses and wealthy individuals.
“The people of Missouri need to know that the Democratic Party has a tax plan, because we all agree that there are changes we can make,” Carpenter said. “The people should know that we have a plan, that it can work, and that it’s better for them than the bills being considered by the majority.”
To contact Collin Reischman, email email@example.com or via Twitter at @Collin_MOTimes.