Following the Missouri House passage of Senate Bill 509, Gov. Jay Nixon wasted no time decrying the bill. Here are the facts: Senate Bill 509 would cut the individual income tax rate from 6 percent to 5.5 percent and phase in a 25 percent deduction on an individual’s business income. The changes would not take effect until 2017, and only if Missouri’s net general revenues rise by $150 million over the highest level across the previous three years. Every worker in the state and many small businesses would benefit from the first broad-based tax relief in nearly 100 years.
The governor’s message strays from the facts and echoes his previous attacks on providing Missourians tax relief. On behalf of the small business members we represent and workers they employ – all of whom would benefit from this tax relief – we need to set the record straight.
First, it is especially troubling to see Gov. Nixon successfully framing the issue in the media as a tax cut for “lobbyists and lawyers.” What about the farmers, barbers, daycare owners, pet groomers, carpenters, and thousands of other categories of small business owners who would benefit from this tax cut? What about the factory workers, truck drivers, teachers, and other hard-working Missourians who would benefit by keeping more of their paychecks? Why doesn’t he mention these taxpayers when talking about the bill? Maybe he hopes they won’t notice.
Even more deceiving is the governor’s line that this legislation is an attack on education and would cut education funding. The legislation delays implementation of the tax cut until 2017, when the governor’s own projections show that the education foundation formula will be fully funded. The tax breaks will not go into effect unless $750 million in additional funding comes into state revenue. How can the governor say education will receive less funding, when simple math shows the opposite?
But, the governor has not stopped there. Now he says the bill would eliminate nearly all of Missouri’s income taxes, although most legal experts and even a former Missouri Supreme Court Chief Justice have said that is not the case.
Using this rationale to veto the bill is disingenuous. Clearly, this was not the legislative intent of the bill. Even if the courts find a problem with the legislation, the language could be fixed long before the tax breaks go into effect.
We should not lose the momentum for this opportunity to give Missourians a much-deserved tax break and better position our state among our neighbors. Six of the eight states bordering Missouri have made moves to cut taxes. Eighteen states cut taxes last year alone. In a decade, we will see the difference in the economies of those states that have established aggressive, taxpayer-friendly policy and those states that stood still. We are being left behind by states that have embraced reform. Instead, in Missouri, our governor is spending taxpayers’ dollars flying around the state and holding press conferences rather than allowing them to keep a small amount of what they paid into Missouri’s surplus. At the very least, we hope that taxpayers, reporters and legislators will see through the rhetoric.