Monday night, the Missouri Senate worked
until nearly midnight and gave its approval to 13 budget bills
(HBs 1-13), appropriating a $24.7 billion operating budget for
FY 2014 (July 1, 2013 to June 30, 2014). The bills address every
aspect of state government from education to transportation. The
13 budget bills will be sent back to the House for its consideration,
and if the House disagrees with the Senate’s budget proposal, a
conference committee will be called to work out any differences
and generate a compromise. The deadline to have the budget to the
governor is Friday, May 10. The most significant difference between
the Missouri budget process and that of the federal government
is that our budget will be balanced, as is required under the Missouri
Constitution.
Although budget bills all stem from appropriations, tax policy is no less a part
of Missouri’s budget, and SB
26 is a bill about tax policy. As a member of the Senate Ways and Means Committee,
I was invited to participate in the development of SB 26, which provides some
tax savings to Missourians and should further benefit citizens by beginning the
shift from taxing income to taxing consumption. The bill includes several other
tax reforms and, with slight revisions from the House, has returned to the Senate
for its consideration. The measure could be up for final debate as early as next
week. The purpose of the bill is to reduce tax burdens on hard-working Missourians
and free up capital for job creators.
One reason to begin shifting away from taxing income is that this type of tax
can be incredibly draining on Missouri business owners. It hinders plans for
expanding companies and creating new jobs. Additionally, some of our eight border
states are reforming their tax codes and becoming more competitive in attracting
business and jobs away from Missouri. Tennessee, for instance, has zero percent
individual income tax and relies on a sales tax. In turn, Tennessee has surpassed
Missouri in population, has a larger budget by more than $5 billion, and has
a lower property tax burden. Senate Bill 26 would make us more competitive and
be a great catalyst to advance economic development in Missouri.
A separate legislative instrument addressing the need to reform Missouri’s tax
policy is SJR
24, which received a hearing in the Senate Ways and Means Committee on April
25. It would, upon voter approval, replace income taxes with an increased sales
and use tax. The initiative would prohibit the collection of franchise taxes
and corporate income taxes beginning on Jan. 1, 2017. No income tax credits may
be authorized after that same date, except the senior citizens property tax relief
credit. No tax may be imposed on purchases for business or investment purposes,
and personal income taxes and withholdings taxes would be reduced by 25 percent
per year, until eliminated.
The proposed constitutional amendment would increase take-home pay, provide real
incentives for businesses to expand and relocate to Missouri, and shift every
business’s focus from manipulating its tax status and treatment to hide profitability,
to winning and satisfying customers and employees to increase profitability.
It also eliminates government control and influence on how we spend our money;
a “big brother” government that uses tax policy to manipulate how we conduct
our business does not benefit Missourians.
The business of the Legislature is to protect its citizens from unconstitutional,
irrational, and intrusive government and to foster an environment of individual
liberty and economic freedom that lets citizens thrive in their businesses and
careers. Many laws and regulations are not beneficial and may even hamper citizens’
efforts to earn a living and raise a prosperous and successful family in Missouri.
Prosperity is the only reliable source of state revenue, and good tax policy
is the friend of prosperity.
I appreciate you reading this Legislative Report, and please don’t hesitate to
contact my office at (573) 751-2108 if you have any questions. Thank you and
God bless.
|
