House Democrats propose tax cut legislation

Rep. Jon Carpenter
Rep. Jon Carpenter

JEFFERSON CITY, Mo – House democrats met this afternoon to discuss a legislation that was filed earlier today that would “reduce taxes for 99 percent of Missourians.”

The legislation is sponsored by Rep. Jon Carpenter, D Kansas City, and fellow house Democrats like House Minority Leader Jake Hummel, D-St. Louis. Carpenter filed similar legislation last year, but that bill included an internet sales tax and a cigarette tax. This year’s bill contains no such provisions.

House Bill 1328 was described as “revenue neutral” and “fiscally responsible alternative to last year” by Carpenter. As opposed to the current system under which all Missourians making $9,000 annually or more pay six percent, the proposed system would include three new tax brackets.

Under Carpenter’s bill, those making up to $30,000 annually will pay a four percent rate, those making between $30,000 through $300,000 would pay six percent, and Missourians making more than $300,000 annually would pay an eight percent tax rate. Because of the new brackets, someone making $250,000 a year would still get a tax cut, Carpenter said.

“Under this plan, even if you make a quarter of a million, you are only going to pay the new rate of four percent on the first 30,000 in income, and then the six percent rate for everything over that, so it still represents a tax cut for a quarter-millionaire,” Carpenter said.

The tax plan highlights the difference in Republican and Democrat philosophies on tax legislation. While most Republican tax legislation in recent years has focused on an across-the-board reduction in the current 6 percent rate and sometimes even larger reductions for corporate and business income, Carpenter and his fellow Democrats have largely supported bills aimed at creating new brackets and focusing solely on individual rates.

“I just think it’s more appropriate to give Missourians a tax cut across the board before we put money back into the pockets of some of the wealthiest corporations and businesses,” Carpenter said. “I think what both parties are agreeing on is the need for tax reform, I completely agree the need is there. But there are different approaches between what [Republicans] have proposed in the past and this year and what we propose.”

Carpenter said that the fiscal note was still being calculated, but that the bill would be “very close” to revenue neutral. The reduction in rates for most Missourians shouldn’t have a drastic affect on state revenues with the increase in rates for the richest individuals.

“If it does have a loss in revenue it would be very minimal, certainly nothing like [House Bill] 253 last year or [Senator Will Kraus’] bill this year,” Carpenter said.

Missourians making $15,000 yearly or less are entitled to deductions ranging from $500 to $2,500, depending on their income under the proposed legislation.

And while Carpenter says his bill is an easy sell to most Missourians, the Republican-controlled House may be unlikely to even provide the bill with a hearing. Last year, Carpenter’s bill with similar provisions was never reported to a committee, but Carpenter frequently mentioned the legislation in House floor debates on HB 253.

“I’m always hopeful, I think it deserves serious consideration,” Carpenter said. “As I said, we all agree the need is there. So lets talk about some of our options.”