The Missouri Senate has given initial approval to a far-reaching tax plan which would cut rates of both individuals and corporations.
The measure which is a combination of blueprints from three senators would lower the income tax most Missourians pay from 5.9% to 5.25%. The Corporate rate would drop from 6.25% to 5.25%, a smaller decrease than the reduction to 4.25% that was previously in the legislation. The measure seeks to raise revenues to offset tax cuts by eliminating individual and corporate income tax deductions for federal taxes. It would also enter the state into the Streamlined Sales and Use Tax Agreement, a national effort partially aimed at generating tax revenues from online sales.
In addition, the plan would gradually raise the state’s motor fuel tax by 10 cents over an eight-year period. A provision to limit low-income housing tax credits to $135 million has been dumped from the measure. The sweeping tax plan received its initial approval with only two amendments and relatively little discussion. Opposition from interest groups over some features of the proposal could cloud its final approval as the Senate is required to vote on the measure one more time before sending it to the House.