Lowering Missourians’ Tax Burden
Last week, the governor signed into law a bill lowering the state individual income tax rate for most Missourians. House Bill 2540, approved by the Missouri General Assembly in May, will cut the top income tax rate by 0.4 percent in January 2019. The bill complements other tax cuts already signed into law. Altogether, these cuts will eventually lower the top income tax bracket from its current rate of 5.8 percent to a new rate of 5.1 percent over the next several years, as long as Missouri’s general revenue collections meet certain targets. Revenue losses will be offset by phasing out federal deductions, ensuring the tax cuts are fiscally responsible.
By reducing the state’s top income tax rate, House Bill 2540 directly benefits the vast majority of Missouri taxpayers. In the Show-Me State, the top rate formerly kicked in around $9,000 of income. The new bill will technically eliminate that top bracket, making the second-highest bracket, which begins at around $8,000 of income, the new top income bracket. If you make more than that amount, this tax cut applies to your earnings.
The purpose of these cuts is to preserve the good health of our economy. When government is run more efficiently, taxpayers can keep more of their hard-earned dollars. More money in the pockets of ordinary citizens means more economic activity, as people are less strapped for cash and are more likely to purchase goods and services. This spending in turn boosts businesses, who can then afford to hire more people or raise current employees’ pay. By keeping tax rates low, we’re greasing the wheels of the economy so it operates more effectively, thereby benefiting workers, consumers and business-owners all at the same time.
As always, please feel free to call, email or write with your ideas or concerns. My Capitol office number is (573) 751-1415, my email is dan.hegeman@senate.mo.gov and my mailing address is Room 332, State Capitol Building, Jefferson City, MO 65101.