State Sen. Will Kraus, Lee’s Summit, is leading a charge to cut state income taxes while raising sales taxes in Missouri.
The proposal, Senate Bill 26, would lower personal and corporate income tax by .75 percent over a five-year period. Small businesses would be allowed a 50 percent deduction for business income, which would be phased in over the five-year span.
The measure would also raise the state sales and use tax by a one-half percent, phased in over five years. The measure is expected to cut taxes across the state by $450 million.
The bill also increases the personal exemption on individual income tax for Missourians making less than $20,000 a year by $2,000. Presently the exemption is $2,100.
It has passed by a 23-11 vote and is being considered by the Missouri House, but could be amended. Kraus said the tax cut combined with tax credit reform will have a positive effect on the state budget.
Gov. Jay Nixon strongly opposes the sales tax increase.
Nixon said the bill would raise taxes on all Missourians and increase the cost of almost everything they buy.
“Everyday necessities, from clothing to Kleenex, would become more expensive,” Nixon wrote. “Families would have to pay more for the same products, putting an additional strain on household budgets.”
Nixon said shifting taxes away from corporations and the affluent puts the burden on those who can least afford added costs.
Kraus, in a statement, said the governor was ignoring provisions made to protect lower-income residents.
“Neither the governor, nor any member of his staff, approached me with concerns regarding SB 26 over the full two-month process it took to perfect this bill,” Kraus said in a written statement. “It is clear that the governor and his staff read only half of SB 26, and that they are content with using scare tactics to advance their agenda.”
Kraus said special care was taken, at the request of minority members of the Senate, to provide the extra tax relief for Missourians making less than $20,000 and for the smallest Missouri corporations. Kraus noted that in the past he’s sponsored and supported tax relief for both Missouri’s veterans and senior citizens.
“For the governor to suggest that I, as a veteran and current member of the National Guard, would harm veterans is offensive,” Kraus said. “Missourians deserve the truth, and the truth is that SB 26 represents an affordable tax cut that will save every taxpayer money.”