State legislators in Jefferson City continue to see the wisdom of a tax cut for every Missouri business in House Bill 253.
Rep. T.J. Berry (Photo courtesy of Tim Bommel, Mo. House of Reps.)
The legislation, sponsored by State Representative T.J. Berry (R-Clay County), cleared another hurdle Thursday when it was voted “Do Pass” out of the Missouri Senate’s Ways and Means Committee. The bill has to clear one more legislative hurdle before heading to the Senate floor for debate.
House Bill 253 represents a new approach to cutting taxes on businesses in the state. The bill, suggested by Associated Industries, would cut the income taxes of every Missouri business in half over five years.
The first cut of 10% would be effective for the 2013 tax year because net income tax revenues for fiscal year 2012 were greater than fiscal year 2011. For each of the next four tax years in which the net income tax revenues are greater than in fiscal year 2011, income taxes for all businesses would be reduced by an additional 10% until the total reduction of 50% has been achieved.
For companies that pay their employees at least 150% of their county’s average wage, income taxes would be cut in half immediately, beginning in tax year 2013.
“This bill gives a tool, especially to the west side of the state, to blunt the attack that Kansas is making with its reduction on its income tax,” said Berry. “We can’t live in a static environment. (Kansas) has made a move, now we have to make a move and hopefully our move is much smarter than theirs.”
Berry points to the fact that tax cuts layed out in House Bill 253 only go into effect if state income tax collections are growing. The approach may be novel, but Berry said it’s time to think of government as a business.
“We’re always moving in business, the environment is never static,” said Berry. “But you have measurements, and this bill brings these measurements to the government level, and then we can say ‘yes, we need to move forward or move a different direction.’”
AIM president Ray McCarty pointed out that the tax cuts in HB 253 apply to every business in Missouri, no matter how large or how small.
“That’s what makes this different from any kind of a tax credit program, or any of the other ideas that are out there,” said McCarty. “It’s a responsible approach to tax relief that helps existing businesses as well as new ones that we’re trying to attract.”
The legislative session has just two weeks to run. Berry acknowledges that almost anything can happen to legislation at this point, but he says he’s optimistic.
“At this point, with two weeks left, there are only a few vehicles that are available to enact comprehensive tax reform,” said Berry. ‘And this is the first time we have ever looked at anything that approaches comprehensive tax reform.”
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