JEFFERSON CITY, Mo – A tax cut focusing on the bottom 60 percent of wage earners in Missouri got bi-partisan support out of committee, and the Democratic sponsor says the bill has wide support on both sides of the aisle.
The bill, HB 1120 sponsored by Jeremy LaFaver, D-Kansas City, would create an Earned Income Tax Credit in the state of Missouri. Currently, Missouri citizens can receive the federal EITC if they meet qualifications.
LaFaver says the program is so successful that many states are creating their own EITC. Twenty-six states, including neighboring Oklahoma, Kansas, Iowa and Illinois have all created state EITC’s. LaFaver’s bill, HB 1120, would create a Missouri EITC equal to 20 percent of the federal credit.
In the 2011 tax year, more than 500,000 Missourians qualified for the federal EITC. Those same Missourians would now be eligible for the Missouri EITC, if LaFaver’s bill passes. In that same year, the average federal EITC was $2,905 for a family with children, amounting to a monthly pay increase of about $240.
The bill passed through the House Ways and Means committee with a 10-3 bi-partisan vote. LaFaver is currently working with Rep. Paul Curtman, R-Pacific, to fold the language into a broader tax package.
“This is tax relief that is targeted to people that need it the most,” LaFaver said. “It makes more sense to give this money to people who are going to put that money back into our economy and grow the state.”
LaFaver’s bill has a $100 million fiscal note, which he says he believes his Democratic allies will be comfortable with, as it is less than annual revenue growth. LaFaver and Curtman are currently working to include several tax relief measures in a larger bill, including tax amnesty and business pass through changes. LaFaver says he hopes working with a Republican will help bring House leadership on board but is preparing the same issues that were broached during debates last year to come up again.
“Unfortunately I imagine we’ll end up sending something to the Governor’s desk that simply isn’t palatable with him and he’ll veto it and we’ll get involved in another ugly veto fight,” LaFaver said. “I’d love to be able to be more optimistic about us coming together and sending a bill up that is going to help Missourians, but I think House leadership is more in- terested in political points than helping Missourians.”
Collin Reischman was the Managing Editor for The Missouri Times, and a graduate of Webster University with a Bachelor of Arts in Journalism.
