Opponents of GOP-sponsored tax relief in Missouri see a looming disaster on the horizon. Frankly, we don't see anything like that.
The tax measure that will now become law over Gov. Jay Nixon's veto is not anything like the deep tax cut plan enacted in Kansas.
It is markedly less ambitious than the plan offered a year ago in Missouri. It is far more responsible and measured than has been suggested at any time by our disappointed governor.
Make your own judgment:
- Three years from now — but only if state tax revenues are growing — Missourians will see the first one-tenth of one percent cut in state income taxes. The top tax rate of 6 percent would decline to 5.9 percent in that first year. It would be the first cut in the state income tax rate since 1921.
- If state revenues continue to increase by at least $150 million over their high point of the previous three years, then another one-tenth would be cut in year two and so on until the new top rate is reduced to 5.5 percent. The earliest this could occur would be in 2021.
- In similar phased-in fashion, thousands of people involved in business partnerships, limited liability corporations and their own ventures would benefit from a 25 percent deduction for business income reported on personal tax returns.
We accept there will be continuing debate over whether this measure can prompt increased business investment in Missouri — which we think is a real possibility. But even without that result, the tax cuts will provide a modest benefit to millions of taxpayers and restrain the growth of government.
The core calculation is that in an expanding economy, government can afford to share the wealth with taxpayers and still advance its aims in serving the state's residents. The alternative is to cede to government a rising tide of tax money without imposing the kind of fiscal restraint that, in fact, can prompt it to become more efficient.
We think a strong majority of Missourians understand this point, and they should know they are not alone. As the Associated Press reported May 6, more than a third of all states in the union have approved cuts to income taxes in the past two years.
Copyright St. Joseph News-Press. Distributed by the Associated Press.