JEFFERSON CITY, Mo. — One lawmaker is continuing his crusade to cut individual income taxes in an effort to spur economic development.
Sen. Bill Eigel, who has developed a reputation for pushing to cut taxes, presented SB 52 to the Senate Ways and Means Committee on Tuesday morning. The bill aims to transition Missouri away from an income tax to a consumption tax in a revenue neutral way.
But the problem, according to one opponent, is that the bill in its current form is a tax increase on Missourians making $100,000 or less.
“As of right now, it impacts low wage workers more than probably intended,” said Brian Colby with the Missouri Budget Project.
Another person who testified against the measure noted that “from a business perspective, it is not revenue neutral,” while another said that since Missouri is not in a growth mode, “it is time to put a pause on tax cuts.”
Under Eigel’s proposal, the state sales tax would increase 2 percent from 4.225 percent to 6.225 percent while slowly decreasing the top individual income tax to 4 percent.
SB 52 also establishes the Missouri Working Family Tax Credit Act. The tax credit would be applied to a taxpayer’s Missouri income tax liability after all reductions for other credits for which the taxpayer is eligible to have been applied.
Under the bill, for all tax years beginning on or after January 1, 2020, an eligible taxpayer would be allowed a tax credit in an amount equal to 20 percent of the amount such taxpayer would receive under the federal earned income tax credit.
“It has been my consistent belief that the income tax is one of the most destructive institutions that we have in the state today that prohibits and discourages economic growth. There is a high correlation between states that do not have an income tax and states that also have high population growth,” said Eigel. “What this bill tries to do is move the burden from an income tax to a consumption tax.”
He did not that he would be presenting a committee substitute for the measure in his effort for the bill to be “revenue neutral.” According to Eigel, it is important not to threaten revenues that are coming into the budget.