Missouri House begins debate on tax cut bill for ALL Missouri business
As the Missouri House of Representatives begins debate on HBs 1253&1297, Associated Industries of Missouri president Ray McCarty urges members of the body to shut out distorted claims from enemies of the bill and keep their focus on achieving a true tax cut for all Missouri businesses.
“We are encouraged to see that this meaningful tax cut bill has arrived on the House floor so early in the legislative session,” said McCarty. “It proves that Speaker Jones and Floor Leader Diehl are serious about promoting and progressing meaningful tax cutting legislation this year.”
The bill sponsored by T.J. Berry (R-Kearney) would reduce Missouri’s corporation income rate beginning in the 2014 tax year if net individual and corporation income tax revenues are at least FY 2012 levels. Over five years of growth, the corporation income tax rate would be cut in half.
The bill also provides a 10%-50% business income deduction over the same period and subject to the same conditions as the corporation income tax rate cut.
FOR BOTH CUTS, if the employer has average payroll of at least 150% of county average wage, 50% tax cut is immediate.
Recently, opponents of the bill attacked the fact that the bill includes cuts for “pass-through” entities such as law firms. But the businesses included in that category also include sole proprietorships, partnerships and other kinds of small businesses.
According to 2010 tax year data published by the Internal Revenue Service, only 16% of S corporations were “professional, scientific and technical” firms such as law, lobbying and accounting firms. Such firms also accounted for only 16% of the net business income of all S corporations. The remaining 84% of S corporation income was reported by manufacturers (16%), wholesale trade businesses (13%), healthcare professionals and hospitals (11%), construction businesses (8%), retail trade (7%), finance and insurance companies (7%) and the rest was reported by various other industries.
IRS data also confirm 94% of all businesses would benefit from the business income deduction supported by AIM for “pass-through” entities. AIM supports broad-based tax relief that would help ALL businesses in Missouri, including regular corporations that are responsible for nearly one-fourth of all net income reported on tax returns.
“Associated Industries of Missouri will continue to work toward a balanced and measured approach to providing tax relief that will help Missouri job creators be more competitive in the global marketplace, and we look forward to continuing this conversation with the governor and all legislative leaders in the weeks to come,” said McCarty.