Tax cut plan estimated to save $620 million was not triggered by revenue growth.
No Income Tax Cut in 2017
In 2014, Missouri legislators
overrode Gov. Jay Nixon’s veto to pass a bill implementing an income tax cut
plan. However, the tax cut is only triggered if the state’s general revenue
grows by at least $150 million a year, and unfortunately this threshold was not
hit this fiscal year. So, Missourians will be waiting at least another year for
lower income taxes.
Lawmakers had estimated revenue
growth of 2.8 percent during the budgeting process last year, but growth
numbers came in at $77.6 million—less than 1 percent—through June 30, 2016. The
St. Louis Post-Dispatch reported that
sales tax revenue was up by about 4.4 percent, income tax revenue increased by
3.9 percent, and corporate income tax revenue fell 16 percent.
Under the tax cut measure, the top
personal income tax rate would drop from 6 percent to 5.9 percent, saving
taxpayers about $620 million. The top rate would then drop to 5.5 percent over
the next five years, and a 25 percent deduction on business income reported on
individual returns would be added. For small business owners who pay their
taxes at the personal rate as pass-through entities, this will be a helpful
change.
