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Schmitt tax cut bill heard by Ways and Means

JEFFERSON CITY, Mo. – Sen. Eric Schmitt, R-Glendale, was a significant author on a tax cut bill in 2014 sponsored by Sen. Will Kraus, R-Lee’s Summitt, that aimed to phase in gradual but significant tax cuts on the condition that the state still received strong revenues.

Now, Schmitt wants to go a step further with SB 574 by modifiying Kraus’ bill, effectively doubling the rate at which the top rate of personal income taxes and business income deductions decrease.

“Right now, from a philosophical perspective, I personally believe that people and businesses know how to spend their money better than government does,” Schmitt said. He also acknowledges that since this is a familiar system, it would be easier to implement since it is already occurring.

Schmitt
Schmitt

“The prudent approach for us right now is to proceed down a structure and a path that we’ve already established,” he added. The bill was heard by the Senate Ways and Means Committee last week, which is chaired by Kraus.

While tax cuts obviously sound appealing to Missourians and especially conservatives, conversations around the Capitol on funding for various parts of the government have taken center stage – namely that there’s not enough of it. Medicaid, higher education, and transportation are all looking to take larger slices of the state revenue pie, and Schmitt’s bill would mean $1 billion less for the state. He argues that the revenue earned from a better private sector will make up for the difference.

“I’m a Jack Kemp conservative,” Schmitt said. “I think what you’ll see is anytime you’ve had broad based tax cuts, revenue has gone up.”

Schmitt also believes that for Missouri to remain competitive and attractive to businesses it needs to match what many surrounding states have done by cutting taxes.

“It’s naive to think, especially on the Western side of the state to think that small business owner that has a long term lease, when that lease comes up and they have a dry cleaning operation or repair shop that they won’t look to the other side of the state line road to save seven percent on their taxes,” Schmitt said.

Kansas City representative Jeremy LaFaver said in December that this bill is more a rallying cry for the Republican base than effective policy.

“While appealing in theory, we’ve already seen how these kinds of things have devastated Kansas,” LaFaver said in December when Schmitt first filed the legislation. “I’m sure it will get some attention, but I’m hopeful my colleagues will look to Kansas before we jump on another proposal to slash our state budget.”