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Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
JEFFERSON CITY - It's been agreed tax cuts is the top issue.
Now the question is how much?
State Democrats and Republicans agree Missouri citizens should receive tax cuts. However, Democrats are calling for a $191 million cut, while Republicans want to see a $630 million break.
In his annual State of the State address Wednesday, Gov. Mel Carnahan, outlined three main areas where tax cuts can be made.
Carnahan first discussed the personal exemption tax and his views to raise the tax by $900. Couples who file joint returns will receive up to $108 per year, while individual taxpayers will receive a $54 tax break. The tax proposal would exempt over 200,000 households from filing a state income tax return.
"This will raise each taxpayer's personal exemption to $2,100," Carnahan said. "Every Missouri income taxpayer will benefit from this tax cut."
Second on Carnahan's tax agenda was a push to help Missouri businesses by reducing the amount they must pay in corporate franchise tax.
"The vast majority of our Missouri businesses are small," he said, "but they create most of our new jobs."
Missouri businesses must pay the corporate tax if it has assets of at least $200,000. Carnahan stated his proposal would raise this amount to an estimated $1 million.
"This tax cut would virtually eliminate the corporate franchise tax for small businesses," he said.
Self-employed Missourians represent the third part of Carnahan's tax cut plan. Health insurance is usually not affordable for these workers, so a deduction from their adjusted gross income would compensate for the additional cost. While only the smallest businesses would be able to use this tactic, more self-employed workers and families would receive health insurance.
"And we can afford to give Missourians this reasonable tax relief without jeopardizing our investments in education, public safety and other crucial state services," Carnahan said.
Though Republicans did not agree with all points of Carnahan's speech, they came out in support Carnahan's call for the need to work in a bipartisan manner.
"There are three basic questions," said Rep. Floor Leader Delbert Scott, Lowry City. "Are the budget numbers accurate, how much do we have to give back to taxpayers, and how much should we give back?"
Scott joined other Republican representatives and senators to address the need for a tax cut of $630 million, while the proposal from the Democrats allocates $191 million.
"Missouri is no longer a low tax state," Scott said. "We are going in the wrong direction and driving people from Missouri. It is time for meaningful tax cuts."
"The governor and the Democrats may cut taxes because they have to, not because they feel they should," said Senate Republican Leader Steve Ehlmann, St. Charles.
Scott questioned the accuracy of Carnahan's budget by stating that in the past four years the numbers have been off by $1 million.
"If your own CPA was off as much as the government's CPA has been, then you'd fire him," Ehlmann said.
Scott did commend the Democrats by saying he applauded everyone on both sides for realizing the need for tax cuts.
"We will work on bipartisan issues for whatever there is," Scott said.
Tax cuts have become the top priority due to a budget surplus, which calls for a return of excess funds back to the people under the Hancock Amendment. This year, Missouri citizens will receive a slightly lower amount from the Hancock lid than in years past. Each taxpayer will get only $39 while the previous year provided citizens with $59, said state budget director Mark Ward. He said this year's decreased amount is due to the increase in the stock market and Missouri's low unemployment rate of 3.3 percent.
Since the spring of 1998, taxpayers have received $695 million from the Hancock lid. After this fall an estimated $952 million will be returned to citizens.