JEFFERSON CITY— A groundbreaking tax-cut proposal is one step closer to reaching the governor’s desk. The Missouri Senate today (5/8) returned to the House a bill that would provide/implement the biggest tax overhaul in nearly 90 years. If passed, House Bill 253 would gradually cut personal and corporate state income taxes on hard-working Missourians while creating capital for job creators across the state.

The last time the state Legislature cut income taxes was in 1921.

Senate Leader Tom Dempsey, R-St. Charles, said this broad-based tax relief proposal would stimulate Missouri’s economy and would result in job growth.

“Tax reform is a crucial part of our economic development policy and is one of our big priorities for this year,” said Dempsey.  “This tax cut would serve to make us more competitive with surrounding states and send a strong signal that the Show-Me State is open for business.”

Under the proposal, House Bill 253 would reduce personal income taxes by .5 percent over 10 years. Corporate income taxes would decrease over a 10-year span, and small businesses would be allowed a 50 percent deduction for business income phased in over a five-year period.  Unlike Senate Bill 26, passed out of the Senate earlier this session, this bill requires $100 million in increased revenue each year, making the tax cuts effective only if state revenues continue to rise. House Bill 253 also does not include a sales tax increase.

Senator Will Kraus, R-Lee’s Summit, has led the way on income tax reform.  He said the tax-cut plan, in conjunction with tax credit reform, will ultimately have a positive return on the state budget.

“The current tax structure is not working,” said Kraus. “We need to do something different.  This bill will be a tax cut for every Missourian who pays taxes. This is a reasonable cut, and I think the governor should sign this bill.”

Bill handler Sen. Eric Schmitt, R-Glendale, said tax reform is a critical element in growing the state’s economy.

“This bill will make our state one of the most competitive in the country,” said Schmitt.  “It is my intention to work with my colleagues and usher in a new era of growth and prosperity by bringing more investment, economic activity and jobs to the Show-Me State.”

Majority Floor Leader Ron Richard, R-Joplin, said the tax-relief measure will reaffirm the Senate’s commitment to making Missouri a business-friendly state.

“By lowering the income tax rate and providing a business income tax deduction, we can give businesses and individuals the opportunity to reinvest their hard-earned dollars back into our economy,” said Richard. “Here in Missouri, we are cutting inefficient programs and providing the savings to working Missourians and job creators.”

The bill moves to the House, which can accept the changes and send it to the governor’s desk.  Alternatively, the House may ask for a conference to work out any differences.  For more on this bill and others, go to www.senate.mo.gov.