Missouri House passes Republican bill cutting corporate, individual income taxes

Kacen Bayless
·2 min read
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Despite warnings from Democrats and budget analysts, the GOP-controlled Missouri House on Thursday approved legislation that would further lower the state’s income tax rate and cut taxes for companies.

The bill, which passed along party lines by a vote of 111-48, would lower the top state income tax rate from 4.95% to 4.5% starting next year. It also cuts the corporate income tax rate from 4% to 2% next year and allows for future cuts if revenue allows.

The top state income tax rate applies to Missourians who make roughly $22,000 or more a year. The legislation, which is expected to cost the state more than $1 billion once fully implemented, is sponsored by state Rep. Dirk Deaton, a Noel Republican.

“This will return money to the people of Missouri. It’s the right thing to do,” Deaton said on the floor Thursday.

It now heads to the state Senate, where lawmakers are also considering legislation that would eliminate the corporate income tax.

Missouri Democrats on Thursday criticized the tax cuts as irresponsible, saying they would primarily benefit the wealthy and major companies instead of government services such as education and child care.

“Cutting taxes isn’t how you’re going to bring Missouri businesses,” said state Rep. Deb Lavender, a Manchester Democrat. “It would be nice if once you tried something different than offer a historic tax cut that just keeps us living in poverty as a state.”

Republicans have touted the tax cuts as a way to increase economic growth. They say that cutting the corporate income tax would entice companies to come to Missouri, while Democrats cast doubt on that argument.

“I’ve heard a lot of numbers quoted, Missouri is 47th in this, it’s 48th in that, it’s 50th in this,” state Rep. Chad Perkins, a Bowling Green Republican, said Thursday. “Let me tell you a statistic we can be proud of. Missouri will be No. 1 in lowest corporate income tax.”

Thursday’s vote comes less than six months after Missouri Gov. Mike Parson, a Republican, signed into law legislation that lowered the state’s top income tax rate from 5.3% to 4.95%.

Parson and Republicans touted the law passed last year as the biggest tax cut in the state’s history, saying it would help Missourians struggling with inflation.

However, an analysis of the plan by the Missouri Budget Project, a nonprofit that analyzes fiscal policy, found that the tax cut would leave out one-third of Missourians.