(The Center Square) – The day after the nation celebrates Labor Day, Missouri’s legislature will be summoned to a special legislative session to work on cutting the state’s income tax.
Republican Gov. Mike Parson issued a call for the General Assembly to meet at noon on Tuesday, Sept. 6, with a specific agenda – reduce the income tax rate from 5.3% to 4.8% and extend agricultural tax credit programs.
“We can permanently cut Missourians’ taxes by more than $700 million,” Parson said today during a press conference. “And, again, that’s permanent. Missourians will see $700 million returned to them not one time, but every year.”
Missouri ended the 2021 fiscal year on June 30 with a $4.9 billion surplus. Parson attributed the increase in general revenue to higher income and sale tax collections.
Critics of the proposed tax cut believe federal COVID relief funds boost the surplus. They also draw parallels to the 2012 income tax cuts by Kansas Republican Gov. Sam Brownback, which led to subsequent budget deficits.
“While Missouri is fortunate to have the budget reserves it currently does, this situation is temporary, and is a result of short-term federal funds,” Traci Gleason, vice president for External Affairs for the Missouri Budget Project, said in a statement. “Quite simply, relying on the current surplus to fund permanent tax changes isn’t fiscally sustainable, or responsible, and will ultimately require cuts to state services like we saw in Kansas a few years ago.”
Parson said his plan was reviewed by legislators from both sides of the aisle and by “think tanks” of all leanings.
“I’m telling you, we did our homework on this,” said Parson, who said his administration spent almost a year working on the proposal. “I think you’ve got to… understand how important income tax structure is and how much dependency we have on it.”
In addition to reducing the tax rate, Parson’s plan increases the standard deduction for individuals by $2,000 and by $4,000 for married joint filers.
“Combined, these tax cut proposals would mean Missourians would earn their first $16,000 tax free and $32,000 for married joint filers,” Parson said. “To put this in perspective, our plan would mean a single mom with two kids making $35,000 would see nearly a 21% decrease in state taxes paid.”
Parson said extending the sunset clauses on agriculture tax credits from two to six years is equal to other programs.
“Eight times this past session, the General Assembly passed and I signed similar incentive programs with six-year sunsets, including for big companies in our cities and around the state,” Parson said. “And if these programs are good enough for six years, so are programs that support and develop Missouri’s agriculture industry. These agricultural programs can’t be implemented in two years, while achieving the success we all want. Missouri farm families deserve better, and at a minimum, they deserve the same benefit as everyone else.”