Missouri House approves income tax cut
Missouri is gaining national attention for efforts to cut state income tax rates. From AP:
The Missouri House has endorsed a proposed income tax cut that could total hundreds of millions of dollars.
The legislation lowers the top income tax rate for middle-income earners, increases the deduction for people with children and raises the maximum amount of federal taxes that can be deducted on a Missouri return.
The House gave the bill first-round approval Wednesday on a voice vote. It needs another vote to move to the Senate. There are about three weeks left in the legislative session.
Currently, Missouri income more than $9,000 is taxed at a 6 percent rate. The legislation reduces the rate by one-half percentage point for people with incomes up to $50,000. Incomes higher than that ceiling would still be taxed at 6 percent.
The legislation also would allow people to further reduce the amount of their income that is taxable. It would increase Missouri’s current $1,200 deduction per child to $1,600.
Taxpayers also would be able to deduct more of their federal income taxes from their Missouri taxable income. Single taxpayers could deduct up to $7,500 in federal taxes rather than the current $5,000. Married taxpayers could deduct $15,000 instead of the current $10,000 in federal taxes.
“The idea is to put more money back in the pockets of taxpayers who earned it,” [Rep. Scott] Lipke [R-Jackson] said. “Without a doubt it’s going to come back around through sales taxes or income taxes.”