Republican lawmakers are celebrating a successful override of an income tax cutting bill that they say will help spur economic growth.
By a House vote of 109-46 Tuesday morning, a day after the Senate voted 23-8 in favor of the measure; the legislation is now on its way to becoming law. That’s despite fierce objections from Democratic Gov. Jay Nixon, who has made stop after stop in towns across Missouri the past couple of weeks trying to rally support of his veto.
“Today, we showed Missourians why they elected a Republican supermajority to the Missouri legislature: we pass important, conservative policies. Updating our tax laws is an essential, pro-growth reform which will improve our economy by allowing small businesses, farmers, and families across our state to keep more of their own money,” said House Speaker Tim Jones in a statement.
Jones added that the median income has dropped by more than $1,500, and “this common sense tax reform” will transform Missouri into a pro-growth state.
The Speaker had campaigned alongside Americans for Tax Reform President Grover Norquist for an override, while Nixon had sought the support of education officials, saying schools would lose $620 million annually in funding if the bill passes. The Governor has also claimed there is a major flaw in the legislation that would eliminate the top income tax bracket and cost the state nearly $5 billion in yearly revenue.
In a statement, Nixon said, “While scaled back from last year’s billion-dollar House Bill 253, Senate Bill 509 fails to prioritize or adequately protect public education at a time when quality public schools are more important than ever to our ability to create jobs in the global economy. And while its authors may have delayed its impact, Senate Bill 509 remains a very real threat to the principles of fiscal discipline that have helped us maintain our spotless AAA rating for decades. As I have from Day One, I will continue to manage the budget with the resources available and keep our state moving forward.”
The bill reduces the top personal income tax rate of 6 percent to 5.5 percent by 1/10 of a percent each year beginning in 2017. The reductions, however, are incumbent upon growth in the state's general revenue.
The bill also creates an individual income tax deduction for business income. Once fully phased in, it would allow taxpayers to deduct 25 percent of their business income. Additionally, the bill allows for a $500 tax deduction for individuals making under $20,000 a year.