The Budget and Tax Reform
“After 20 years in Congress, I still believe that smaller government and lower taxes are the most effective economic policies.”
The tragic events in Missouri late last week will no doubt dominate political discussions for some time, but the Legislature has not been inactive. It is important to understand that although the current controversy surrounding the governor cannot be ignored, the Legislature operates as a separate branch and can continue its work. Last week, the Senate was productive, and the week culminated with the passage of Senate Bill 674.
The only job the Legislature must constitutionally do is craft an annual balanced budget. Currently, the Senate is working to approve its version of the state’s 2019 fiscal year budget. That is a short term goal, but at the same time we are looking further ahead and are discussing how to improve Missouri’s economic environment. The question is, how do we best drive economic development across the state while providing tax cuts for families, small businesses and corporations and still maintain a healthy budget required to fund our state’s services?
Senate Bill 674 will help achieve these goals. This measure is a reasonable and sustainable approach to simplifying our tax code because it cuts tax rates without undermining our budget. This bill will lower the corporate income tax rate from 6.25 percent to 3.5 percent beginning Jan. 1, 2019. It also tightens and clarifies tax policy by requiring all corporations to use a single-sales factor income allocation method. This means Missouri corporate taxable income is based exclusively on the percentage of sales made in Missouri, not on the location of property or employees. Most states are going towards the single-sales factor method. Single-sales factor can be a more attractive option for computing Missouri taxable income.
Missouri’s corporate income tax code is complex and outdated. A simplified code will help broaden the overall tax base and lower rates at the same time. By lowering the corporate tax rate, we will make Missouri more competitive and attractive to businesses looking to move here or stay in the state. Senate Bill 674 now proceeds to the House for their consideration.
On another topic, few if anyone is unaware of the first report released by the Missouri House of Representatives regarding the governor’s sexual infidelity and offenses. The House Committee report is beyond disturbing, and their work will continue as they examine additional allegations and seek agreement on what action is required. Only the most evil of political opponents would not grieve over the pain that has been inflicted and continues to be inflicted on everyone affected. Multiple individuals and families need our prayers as well as does every branch of government.
I am struck nonetheless by the contrast of perspectives. A constituent visiting the Capitol remarked to me that if the governor had driven drunk and plunged into a lake and drowned a young woman he could still serve in the U.S. Senate. Or it could be added, that had he performed lewd sexual acts with an intern during his term of office and inside the Oval Office, history suggests he would not be removed from office.
It was the 42nd president who perfected the notion that immoral personal acts should not interfere with governing – even when those acts are performed in office. Republicans, however, have generally not abandoned Biblical standards and are therefore held to a higher standard, even by the very ones who have abandoned those Biblical standards.
Thank you for reading this legislative report. You can contact my office at (573) 751-2108 if you have any questions. We welcome your prayers for the proper application of state government.