In an effort to adjust Missouri’s income tax brackets to align with inflation, Rep. Paul Curtman, R-Pacific, has proposed a bill, House Bill 1268, that would alleviate the tax burden many lower and middle-class Missourian’s are paying.
Currently, the highest Missouri income tax bracket is set at $9,000, meaning an individual making $9,000 or more a year would incur the state’s highest tax rate of six percent. This tax bracket was established in 1931, a time in which a $9,000 yearly income was very high. Had the tax brackets been adjusted for inflation since 1931, the highest tax bracket would be closer to $135,000 today.
This situation creates an inflation tax, causing Missouri to collect an extra $2.5 billion every year in extra income due to inflation. Under this system, a person making $9,000 annually, which is $2,400 below the national poverty level, is paying income tax at the highest rate the state charges.
HB 1268 would have Missouri’s tax brackets adjust for inflation each year from 2015 forward, and would immediately render tax relief to some of the poorest Missourians.
“This bill addresses a problem that illustrates just how antiquated Missouri’s’ tax policy is,” Tracy King, vice president of governmental affairs for the Missouri Chamber, said. “Tax reform is going to be fundamentally necessary to the economic development of our state.”
For more information about tax policy legislation, please contact Tracy King at email@example.com or by phone at 573-634-3511.