Missouri Senate approves initial income tax cut

JEFFERSON CITY, Mo. (KMIZ)

First-round approval has been granted by Missouri senators for a proposed plan to cut individual income taxes.

The proposed plan approved by the Missouri Senate would give an estimated $355 million income tax cut. The bill is sponsored by Rep. Senator Lincoln Hough, from Springfield. The bill is a compromised version of the $700 million tax cut proposed by Republican Governor Mike Parson.

The bill needs a final vote before it moves to the Missouri House, which is expected to happen Wednesday.

If approved, the bill would reduce the top tax rate to 4.95% in 2023, followed by four future reductions triggered by inflation and revenue growth. The top tax rate would sit at 4.5% once it becomes fully implemented.

Parson called the special session after he vetoed a plan for $500 million in tax rebates that was initially included in the state budget.

The Missouri Budget Project (MBP), a non-profit, says it is disappointed by the bill.

"We're a little disappointed, it says a large dollar amount, but it really doesn't help low-wage workers, and some retirees, and people living on fixed income," Vice President of Public Policy for MBP Brian Colby said.

Colby said inflation is disproportionately affecting the working class the most.

"We really hoped that the Senate would have included a little more to help those folks out," he said.

Colby said MBP hopes that when the bill gets to the House, or if they revisit the bill next year, that "a bottom up tax credit that helps low-wage workers" is adopted.

The House is expected to vote on the bill during Wednesday's special session meeting.