With an economic climate in which many citizens still feel uncertain about retaining their jobs, as well as competition between Missouri’s multiple border states for those jobs, our state needs to be competitive and not only provide incentives for Missouri businesses to continue to grow in our state, but entice prospective companies to flock to our state and call the Show-Me State home. 

A measure (SB 26) that addresses income tax received approval in the Missouri Senate this week. The goal with this legislation is to acknowledge Missouri businesses that keep our communities — large and small — energetic and thriving, while ensuring that hard-working taxpayers keep their wallets as full as possible to pay their bills and raise their families.

Under the legislation, individual and corporate state income tax would be lowered by .75 percent over a five-year timeframe, beginning with tax year 2014. Small businesses would be allowed a 50 percent deduction for business income, which would be phased in over a five-year period. The bill would raise the state sales and use tax by a one-half percent, phased in over five years. The measure is projected to slash taxes across Missouri by $450 million.  

Special care was also taken with this measure to help protect our state’s most vulnerable citizens, including low-income Missourians and seniors. Currently, there is a personal exemption amount of $2,100 for personal income taxes, but the bill would increase the amount by $2,000 for individuals with a Missouri adjusted gross income of less than $20,000. In addition, according to a report by the Associated Press, which conducted an analysis of the tax plan with help from a former state budget director, the plan could “save several dozen dollars annually for a Missouri family of four earning a little more than the state's median household income of about $45,000.”

It’s been stated that this policy would be the biggest tax overhaul that Missouri has seen in nearly 90 years; the last time the Legislature cut income taxes was in 1921. We need to enact broad-based policy that will help all Missouri businesses succeed and create additional jobs. It’s a great feeling of satisfaction when Missouri businesses have their lights on and customers are bustling in and out the doors. Our business owners take great pride in displaying their “We’re Open” signs on the front doors, and we need to encourage them to keep up the good work. In addition, by initiating income tax cuts, we’re sending a message to interested investors that our state would welcome their business with open arms and we will make their time in the Show-Me State worth their while.

As the measure progresses to the House, there will likely be alterations to the measure and the two chambers will need to reach a compromise. If the Senate and House cannot reach an agreement, a conference committee may be called, in which a select number of lawmakers from both chambers may come together and try to iron out their differences. Please keep track of the progress of SB 26 by visiting the Missouri Senate website at www.senate.mo.gov. If you have any questions, don’t hesitate to contact my Capitol office. Thank you and God bless.