Pro — Missouri House
On Wednesday, House Republicans celebrate the passage of House Bill 594 and 508, landmark legislation that supports Missouri families and communities and makes the Show-Me State more competitive for businesses and entrepreneurs.
“We are proud to cut taxes for everyday Missourians and give our local communities the resources they need to thrive,” Speaker Jon Patterson, R-Lee’s Summit, said. “Cutting taxes on diapers and feminine hygiene products affects ALL Missouri families and will have the greatest positive impact with low-income women and girls across Missouri. House Bill 594 is family first legislation.”
“There is something in this for everyone,” Speaker Pro Tem Chad Perkins, R-Bowling Green, said. “I couldn’t imagine anyone not supporting this.”
House Bills 594 and 508 work for Missouri families and communities by:
—Removing state sales tax on diapers and feminine hygiene products;
—Eliminating capital gains tax from the sale of Missourians’ homes, farms, retirement funds, stocks, and other major capital investments;
—Expanding existing property tax relief programs for seniors and tying new thresholds to the Consumer Price Index (CPI);
—Investing in public safety across several local law enforcement organizations;
—Supporting local fire, ambulance, and first responder groups across the state;
—Advancing Missouri’s final-mile broadband expansion efforts and removing sales tax charges on broadband equipment;
—Assisting a local community center in Independence;
With passage and formal signing from the Missouri General Assembly, House Bills 594 and 508 now head to the governor’s desk for his signature into law.
Con — Missouri Budget Project
With Wednesday’s vote in the Missouri House, the state legislature has forwarded to Governor Kehoe a tax bill that will reduce state revenue by at least half a billion dollars annually. This comes at a time when our state is already facing significant budget pressures, as well as uncertainty regarding federal funding in the coming years.
House Bill 594 will exempt capital gains from state income tax. Like the vast majority of states, Missouri taxes capital gains - the profits/earnings on the sale of stocks, cryptocurrencies, real estate and other valuables - through the individual income tax structure, just like other income.
The new exemption would send hundreds of millions to Missouri’s wealthiest. 80 percent of this tax giveaway goes to the top 5 percent of Missouri taxpayers, with more than two-thirds going to the top one percent – or those with incomes averaging $1.9 billion a year.
The House made clear its priorities when it decided to advance to the Governor this giveaway for an elite few, even when it chose not to fully fund K-12 education in its version of next year’s state budget.
State legislators will already be facing budget shortalls in the coming years because of previously approved tax cuts that are being implemented.
Moreover, discussions underway in Congress could result in a disastrous blow to Missouri. Cuts at the federal level could shift more than $2 billion in health and nutrition costs to the state of Missouri. That would mean devasting budget cuts for years to come and would lead to an economic crisis.
The legislature’s choice to prioritize a special interest tax giveaway is irresponsible and a mismanagement of taxpayer dollars. It’s also a slap in the face to the bulk of Missouri taxpayers who are struggling to afford groceries and who already pay a higher portion of their income in state and local taxes than do the folks who will get a windfall from the capital gains exemption.
Although we remain deeply concerned about the underlying bill, some additions made in the Senate will provide much needed assistance to older adults and Missourians with disabilities who have fixed incomes. Specifically, the bill includes updates to the Missouri property tax credit, also known as the circuit breaker tax credit.
The credit helps to offset the cost of property tax for older adults and Missourians with disabilities who have fixed incomes. However, neither income eligibility nor the amount of the credit have been updated in 17 years. As a result, fewer Missourians who need it can qualify. Those that do often receive a very small credit.
The improvements to this credit will help Missourians stay in their homes and communities. The circuit breaker improvements will help nearly 195,000 households and demonstrate the type of tax policy improvements the state legislature should prioritize.
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