Parson hopes for permanent $700 million tax cut

Watch Parson's news conference in the player above.

JEFFERSON CITY, Mo. (KMIZ)

Missouri Gov. Mike Parson will bring legislators back to the Capitol after Labor Day to take up more than $700 million in annual income tax cuts.

Parson gave details about his call for a special session during a news conference in his office Monday. Parson has proposed the extension of certain agricultural tax credits along with a permanent income tax cut. The proposed income tax cut would lower the top tax bracket rate from 5.3% to 4.8%, with Parson saying it will save Missourians more than $700 million per year.

The special session would start Sept. 6.

Parson cited low unemployment and large annual gains in general revenue as two reasons the income tax cut is a good idea.

"All this shows why now is the time for the largest income tax cut in our state history," Parson said.

The agricultural tax credits lawmakers will consider include programs for meat processing, biodiesel and urban farms.

Meanwhile, Parson said the income-tax cut would save 21% on income taxes for a single mother with two kids who makes $35,000 per year. A senior making $20,000 per year would no longer pay anything.

The proposal increases the standard deduction by $2,000 for individuals. If implemented Missourians would not pay taxes on their first $16,000 of income. The proposal would also eliminate the state's bottom two tax brackets.

Parson has said he wants the cuts to be in place before Jan. 1 so they apply to Missourians' next tax filings.

Democrats panned Parson's proposal, saying the huge surplus provided in part by federal COVID-19 funds is temporary.

“A cardinal rule of responsible budgeting is don’t use temporary revenue to take on permanent expenses," House Minority Leader Crystal Quade (D-Springfield) said in a statement. "Yet the governor’s plan uses a temporary budget surplus as cover for a permanent loss of revenue that will put Missouri government back into the financial hole it just climbed out of. House Democrats are wary of jeopardizing the state’s financial future for politically motivated tax cuts that, as usual, primarily benefit the wealthy."

Parson has said taxpayers see a two- to threefold return on investment in the agricultural tax credit programs. The General Assembly extended the agricultural tax credits for two years in this year's session, but Parson wants them to be extended for at least six.

Leading up to Monday's announcement, Parson has been meeting with lawmakers to discuss the special session.

"... I wanted them to understand why we can do a tax cut, the largest tax cuts in the state's history, to the people of the state of Missouri," Parson said in early August.

Missouri Senate Minority Leader John Rizzo (D-Kansas City) and his party approved of a proposal from the Republican chair of the House budget committee that would give $500 to single filers and $1,000 to married filers. Parson vetoed this measure when he announced his plans for a special session.

"We'll carefully review his new proposal to ensure it helps working families & is fiscally responsible," Rizzo said on Twitter.

House Republicans pointed out in a statement that they had prioritized tax relief in the special session -- citing the income tax credits Parson vetoed.

"The House made substantive tax relief for taxpayers and support for our agriculture industry top priorities during the regular session," Speaker Rob Vescovo said in a statement. "We stand ready to again work on these issues to help Missouri families in these challenging times."

This comes after Parson signed one of the largest budgets in Missouri state history at $47.5 billion.