Eigel proposing reducing income tax from 5.9% to 4.8% for small business owners

  

MERA proposal seeks to reduce tax burden for all incomes, reducing income tax and increasing gas tax

ST. CHARLES, Mo. – State Senator Bill Eigel, R-St. Charles, will file the Missouri Economic Relief Act (MERA), hoping to re-align government spending priorities by decreasing the income tax and increasing fuel use taxes.

“I believe the job of elected leadership is to define what a better tomorrow in Missouri looks like. For decades, Republicans have defined that future as smaller and less intrusive government. So today, I’ll take a big step in that vision becoming a reality by proposing legislation that would enact the largest tax cut Missouri has seen in generations.”

MERA, which Eigel plans to file when the bill pre-filing season begins on December 1, would cut in two primary ways. First, for working and middle-class homes, the four bottom brackets of the income tax code would be completely eliminated. “In Missouri right now, you can earn below the federal income level and still pay the highest rate of tax in the state. That isn’t right—so the bottom four brackets will be completely eliminated as part of MERA,” said Eigel.

“In Missouri right now, you can earn below the federal income level and still pay the highest rate of tax in the state,” Eigel said. “That isn’t right—so the bottom four brackets will be completely eliminated as part of MERA.”

The proposed tax break also extends to small business owners in the higher income band, who would see their top rate drop from 5.9% today to 4.8% under the proposed legislation. According to Eigel, “The best way to stimulate economic growth in Missouri is to lift the burden on the small business owners who are actually creating the jobs that politicians always talk about. MERA will make Missouri the second-lowest income tax state of any of our neighbors—lower than Illinois, Iowa, Kansas, Nebraska, Arkansas,

Eigel

According to Eigel, “The best way to stimulate economic growth in Missouri is to lift the burden on the small business owners who are actually creating the jobs that politicians always talk about. MERA will make Missouri the second-lowest income tax state of any of our neighbors—lower than Illinois, Iowa, Kansas, Nebraska, Arkansas, Oklahoma, and Kentucky. There’s no better incentive for business owners to come to Missouri than more of their own capital.”

MERA also addresses tax code items outside of income tax rates. It will adjust the Missouri motor fuel tax from 17.5 cents to 23.5 cents per gallon, providing near-term dollars to fund Missouri roads and bridges, an ongoing priority for Eigel. “I’ve been talking about transportation funding longer than I’ve been in office,” Eigel said. “A straight increase in any tax is a non-starter. However, an adjustment to the motor fuel tax as part of a broader tax reduction for Missouri citizens is in keeping with our conservative principles. For those wanting to provide immediate help to funding roads and bridges, MERA is a great opportunity.”

“I’ve been talking about transportation funding longer than I’ve been in office,” Eigel said. “A straight increase in any tax is a non-starter. However, an adjustment to the motor fuel tax as part of a broader tax reduction for Missouri citizens is in keeping with our conservative principles. For those wanting to provide immediate help to funding roads and bridges, MERA is a great opportunity.”

In addition to fuel tax rates, MERA touches on tax credit reform by placing an aggregate cap on tax credits that may be authorized in any given year.

“Most folks I’ve talked to acknowledged the need for some reasonable reform to our tax credit system,” Eigel indicated. “Many of these credits make sense for economic and social reasons, and to ensure they continue to do so, we plan to take a big step forward in reforming the system.”

Finally, MERA eliminates several outdated tax exemptions to help offset the cost of the bill, including the federal tax exemption and the employer 2% sale tax on-time pay bonus.

“A majority of the costs associated with MERA will be offset by the elimination of some tax exemptions that make our code more complicated and difficult to understand. In my mind, it hits a lot of bases—lowering taxes, addressing tax credit and transportation funding mechanisms, and making the tax code more straightforward. It would strengthen the budgets of our middle-class families and give small business owners more flexibility to create jobs,” said Eigel.

“A majority of the costs associated with MERA will be offset by the elimination of some tax exemptions that make our code more complicated and difficult to understand,” Eigel said. “In my mind, it hits a lot of bases—lowering taxes, addressing tax credit and transportation funding mechanisms, and making the tax code more straightforward. It would strengthen the budgets of our middle-class families and give small business owners more flexibility to create jobs.”

Overall, Eigel hopes to see tax reform keep more money in Missourians’ pockets than sent to the state.

“Today, Missouri taxpayers are sending more of their hard-earned dollars to Jefferson City than at any other time in the history of our state—and we’ve been far too quick to spend those dollars, many times on priorities that don’t match with the things my constituents ask for,” said Eigel.

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