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Tax cuts are here: Haahr’s bill awaits governor’s signature


JEFFERSON CITY, Mo. — With less than 24 hours left in the 2018 regular session, the House gave final approval of a bill intended to give Missourians a tax break.

Rep. Elijah Haahr’s HB 2540 started out as a major tax overhaul that provided funding for roads and bridges, closed tax loopholes, and was revenue neutral. It was also 429 pages.

The version that came back to the lower chamber after the Senate had its way with it was nine pages.

The Senate stripped out the earned-income tax credit, the Streamlined Sales Tax, modifications to the timely-filing tax allowance, any fee increases — removing any potential transportation infrastructure funding, modifications to the circuit breaker tax, and other changes the tax code.

What was left was a simple straight-forward tax change. The bill reduces the existing individual income tax rate from 5.9 percent to 5.5 percent. Additional triggers based upon revenue growth in the state will eventually lower the individual tax income rate to 5.1 percent, putting Missouri among the top states for lowest state income taxes.

“This is a historic day for the Show-Me State,” said Haahr. “From growing families to the greatest generation, from entrepreneurs to empty nesters, Missourians will pay lower taxes under this proposal.”

“These are common sense, fiscally responsible, bold solutions that will lower the overall tax burden on Missouri families and businesses. Witnessing the economic surge following passage of the federal 2017 Tax Cuts and Jobs Act, the evidence is clear that reducing taxes benefits American families.”

But the measure, which passed in a 101-40, encountered pushback from Democrats who questioned the latest fiscal note which was calculated with language that is no longer in the bill.

“This is the second time we are having a conversation about fiscal notes that are inaccurate,” said Rep. Crystal Quade. “We have had significant changes since [the last] fiscal note.”

“It concerns me how quickly we are trying to push this through without accurate numbers. When we are cutting things like the MoRX program, consumer direct services, that fact that we are going to move forward as a body, without being as close to certain as we can be is really scary.”

Opponents also cautioned against “becoming the next Kansas,” a phrase that Haahr is tired of hearing.

The tax cut he proposed is not nearly as drastic as what Kansas did and that it is a completely different version of tax cuts. He also argues that if the bill does cause a drastic downswing in revenue, they can go back to the voters or make changes to the budget.

“I’m good with either option,” said Haahr. “We serve the people.”