The Missouri General Assembly has spent considerable time this session on a modest Republican income tax cut proposal that will be vetoed by Democrat Gov. Jay Nixon. The prospects for an override appear possible.
The legislation would cut income taxes from 6 percent to 5.5 percent and phase in a 25 percent deduction for business income reported on individual returns. The bill would result in cutting taxes by $620 million when fully implemented, which the governor says would cut deeply into other state programs, including education.
Proponents say one of the benefits would be to make Missouri more attractive to industries searching for a new site in which to operate. The truth is Missouri already is a low tax state. Companies looking at Missouri know that.
It is rare when an industrial prospect even mentions the state income tax rate. Companies do want to know what state and local incentives are available. Companies do put a high priority on the available work force, especially as to skilled workers. They also look at many other factors, such as educational and health facilities and the overall quality of life.
The tax cut proposal could be viewed as a minor point in making the state more competitive. We don’t believe it would have a major impact in luring more business to Missouri.
It sounds good to say it would make the state more competitive, but in reality this small income tax cut would not play that big of a role in industrial and commercial development. It would play a big role in the loss of revenue for the state.
Everybody enjoys a tax cut, but the governor does have a point about the loss of revenue.