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House gives early approval to multiple tax cuts


JEFFERSON CITY, Mo. — The Missouri House of Representatives gave preliminary approval to a number of tax cut measures today, likely signaling a coming battle with their counterparts in the Missouri Senate and Democratic Gov. Jay Nixon.

House and Senate Republicans have vowed to pass tax cuts for both individuals and businesses after Nixon vetoed a similar measure last summer and spent much of the summer and fall campaigning against the veto override, which ultimately failed. But several members disagree about the method of passing a tax cut, and just what the measure should look like.

Last week, Sen. Will Kraus, R-Kansas City, announced he and Nixon reached an agreement on a tax bill, which would cut individual income tax rates by .025 percent and include significant reforms to the state’s tax credit programs. The compromise language also includes stipulating cuts that only take place if the state has a total revenue growth of $200 million and state lawmakers fully fund the foundation formula.

Rep. TJ Berry
Rep. TJ Berry

But many House members, and some in the senate, criticized the compromise, claiming the cut was simply too small to be meaningful. The House, signaling they will not be waiting on senate language, pushed forward with two bills on Wednesday. The first makes cuts to business income reported on individual returns and corporate tax rates. The second was aimed at cutting taxes on individual income.

The business-income deduction bill, sponsored by Rep. T.J. Berry, R-Kearney, could cost up to $347 million annually in state revenue, but Berry and his Republican colleagues contend that the state will more than make up for that in economic stimulus.

“We’re going to give our businesses the opportunity to hire more employees,” Berry said. “And we’re going to become more attractive to businesses.”

HB 1295, sponsored by Rep. Andrew Koenig would reduce the individual income tax rate to 5,3 percent over time from its current 6 percent over a period of seven years, provided state revenue grows by at least $150 million from its highest point in the last three years.

Both bills will still need final approval in the House before moving on to the senate, although each received almost identical party-line vote approval, with a few absent members. But with senate leadership promising to deal with senate priorities before handling House bills, and Kraus still waiting to introduce his compromise language on the floor as an amendment, it is unclear how soon either bill will move closer to Nixon’s desk.