Grow Missouri has created a page on their website to address the many myths about House Bill 253. Here are the facts behind the bill. Please contact the Missouri Chamber of Commerce and Industry if you have any questions about HB 253 at 573-634-3511.
Myth #1: Passage of House Bill 253 will result in state revenue shortfalls.
FACT: Missouri ranks 47th in the country in economic growth and it’s going to take lower taxes to rebuild our state’s economy. House Bill 253 gives income tax relief to every business and every individual in a fiscally responsible tax reform package similar to those that have proven to bring in more revenue, not less, in surrounding states. Kansas has collected $160 million more than the previous year and Oklahoma has collected record revenue levels at the lowest rates in their state’s history. In addition, since Gov. Brownback took office and initiated his tax reduction plan in 2011, unemployment in Kansas has dropped from7.2% to 5.5%, while unemployment in Missouri has remained stagnant at 6.6%. House Bill 253 was carefully crafted to ensure job creators see immediate relief and includes a system of checks-and-balances to guard against budget shortfalls. Each year, the state would need more money than it needs to operate before triggering a lower individual and corporate income tax cut.
Myth #2: Passage of House Bill 253 will hurt education.
FACT: Missouri schools are being funded at the highest levels in our state’s history and the state currently has approximately $400 million of surplus revenue. However, if Missouri remains one of the worst states in economic performance, the state could lose revenue for schools as a result of businesses and individuals flocking to other states. Alternatively, once House Bill 253 is fully phased-in it will represent a billion dollars of growth in our state economy and generate at least $300 million in new revenues for things like education. Leadership in the House and Senate are committed to funding education and have passed House Bill 253 as a plan to draw more opportunities to our state. Currently, however, education is being hurt by the withholds that Gov. Nixon has levied against education in this fiscal year AND those he is threatening in the future because he does not want to relinquish control of the surplus revenues that Missourians have earned.
Myth #3: Passage of House Bill 253 will repeal a sales tax exemption for prescription drugs.
FACT: Ironically, the Governor has the sole ability to increase the sales tax on prescription drugs based on his interpretation of language written and approved by the Department of Revenue under his control, meaning if taxes go up on prescription drugs it will be because Gov. Nixon directed his department to do so. However, the House and Senate are committed to protecting Missourians from this tax increase. Despite this, seniors and families in need of medication should not be used as political hostages by the Governor and his state agencies, which is why we are working hard to make sure you are in charge of your money instead of the government. The Department of Revenue cannot be trusted; they have a track record of wasting taxpayer dollars and infringing upon the privacy of all Missourians.
Myth #4: Passage of House Bill 253 will enable taxpayers to re-file their state income tax for amended returns, claiming an additional 0.5 percent reduction in their income taxes, should the Federal Marketplace Fairness Act (FMFA) or similar legislation pass, which would deplete state revenues.
FACT: It is true that all Missourians could see further relief in their income tax burden if the U.S. House and Senate pass the Federal Marketplace Fairness Act (FMFA) this year. However, the state budget would not take the dramatic one-time hit in revenue being projected by those who favor higher taxes because if the FMFA would pass because it is unconstitutional under Article I, Section 13 of the Bill of Rights to enact an ex post facto law that applies retroactive tax rates. Therefore, even though there is a small chance of the FMFA passing this year, it would provide more tax relief for Missourians in a fiscally responsible manner over the next ten years without draining the state’s budget.
Background on Fiscal Impact: As recently reported by the Kansas City Star, budget projections are not based on fact and are an estimate of revenues collected in previous fiscal years. Therefore, when opponents of lowering taxes argue it will deplete the state’s budget and starve public education of adequate funding, they are assuming that none of the money being returned to taxpayers would be circulated back through the economy to generate revenue for the state. History from the state and federal level has shown how lower taxes can stimulate the economy by attracting businesses and increasing consumer spending, thus bringing in more money for the state. House Bill 253 operates on the ideological belief that: 1) Lower taxes can help grow the economy; 2) People can spend their money better than the government; and 3) If the state has more money than it needs to operate, the funds should be returned to the taxpayers through lower income taxes instead of growing the size of government.