JEFFERSON CITY, Mo – A saying that is often bandied about the Capitol is “don’t let perfect be the enemy of the good”. However, the opposite is also true – a bill can become so bloated with compromise that it is unrecognizable to its original supporters.
This is the way Sen. Eric Schmitt, R-St. Louis, feels about the Senate’s principal tax cut proposal, SB 509, sponsored by Will Kraus, R-Lee’s Summit.
“I did not want to abandon our tax cut efforts on March 9,” Schmitt said.
Schmitt proposed an amendment, upheld on the Senate floor, stripping away recent eliminations of targeted tax cuts and strengthening the bill’s original aim – establishing a five-year cut, responsive to $100 million revenue triggers. As introduced, the bill cut individual income tax from 6 percent to 5 percent; Schmitt’s amendment drops that all the way down to 4.7 percent.
“To have the tax burden for businesses cut in half for the first time helps us to grow Missouri’s economy,” Schmitt said.
Before Schmitt’s amendment, SB 509 had undergone two huge changes. The first was a compromise brokered by Kraus and Gov. Jay Nixon. That change only provided a .25 percent cut for every $200 million in revenue. The compromise also included a commitment to fully fund the foundation formula for education.
Kraus also said that eliminating the targeted tax cuts was crucial to receiving Nixon’s blessing.
“Gov. Nixon has been clear. He believes we have to fund our schools and he believes we need to reform tax credits,” Kraus said.
Sen. Brad Lager, R-Savannah, has worked with Kraus to include eliminating targeted tax cuts. Lager has made tax credits one of his key issues in his last term in office.
“This bill still deals with taxes but it is different than the way it was initially introduced,” Lager said. “I believe if you can put a reasonable tax cut with tax credit reform on the Governor’s desk, it has a high probability of receiving his signature.”
Schmitt would like to see a tax bill passed by the governor, but it is not important enough for him to compromise the key purpose of the bill.
“My belief is that this cut has to be clear and convincing,” Schmitt said. “Cutting taxes for every business in half – that would move the needle. If we didn’t pursue this we’re sending a message that this isn’t a priority for us.”
Conservative tax groups like Grow Missouri and United for Missouri agree with Schmitt that there were too many things involved in the bill.
“It’s like they’re trying to create an ice cream sundae of a tax reform bill,” Treasurer Aaron Willard of Grow Missouri said.
Willard and Carl Bearden, Director of United for Missouri, said tax credit reform is important but should be pursued in its own bill. Willard and Schmitt agree that a bill included education funding and tax credit reform would come under Hammerschmidt scrutiny.
“I think the fact that there is still conversation going on is incredibly important,” Willard said.
Kraus agrees, stating that the bill will be a focus coming back from spring break.
“We’re still on perfection,” Kraus said. “We still have an opportunity to have a bill that is balanced.”
