The Truth About Tax Relief

Governor Nixon has once again vetoed legislation designed to reduce the tax burden on Missouri families and businesses. Ever since Senate Bill 509 was passed by the General Assembly last month, the Governor has embarked on a misinformation campaign to fabricate non-existent flaws in the bill. In reality, SB 509 is a well-reasoned, responsible approach to tax relief that will benefit all Missourians.

The Facts on SB 509

SB 509 would cut the tax burden on Missouri families and businesses by $620 million annually while safeguarding funding for vital state services like education.

• SB 509 reduces individual income taxes by .05% over a period of five years beginning in 2017.
• Beginning in 2017, small businesses would be allowed to deduct a maximum of 25% of business income over a period of no less than five years. Small businesses make up more than 90% of the employers in our state, and this tax cut is tailored to help them grow and thrive.
• SB 509 would increase the personal income tax exemption by $500 for those whose income is less than $20,000.
• Beginning in 2017, SB 509 requires Missouri’s income tax brackets to be adjusted for inflation.

Safeguarding Education Funding

To preserve the state’s funding levels, SB 509 requires that revenues increase by at least $150 million each year before the next phase of the tax cut takes effect. Missouri’s revenues would have to grow by $750 million in order for the $620 million tax cut to be fully implemented. The net result is that state revenues would increase by at least $130 million, meaning more money for education.

The Undeniable Benefits of Broad-Based Tax Relief

While revenues continue to increase, the state’s GDP (Gross Domestic Product) remains stagnant. In fact, Missouri is ranked 37th in the nation for GDP growth per capita. Missouri’s economy is not growing at a fast enough pace to secure economic opportunities for future generations.

Eighteen states cut taxes in one form or another in 2013, according to the Tax Foundation, and Missouri needs to implement a tax reduction to attract businesses, create quality jobs and remain competitive with our neighbors. SB 509 would invest in Missouri families and businesses by allowing them to keep more of their hard-earned wages, a move that would grow the tax base and increase general revenue.

Missourians know that returning surplus money to taxpayers to grow the economy, rather than growing the size of government, is the right path for our state. Unfortunately, the Governor has decided that playing political games and enlarging government programs are more important than moving our state forward toward economic growth and prosperity.