House Overrides Nixon Tax Cut Veto May 6, 2014

JEFFERSON CITY, Mo. (AP) – Missouri’s Republican-led Legislature enacted the state’s first income tax rate reduction in almost a century Tuesday by overriding the veto of Democratic Gov. Jay Nixon, who has denounced it as a reckless financial experiment.

The new law will gradually cut Missouri’s top individual income tax rate starting in 2017 and make the state just the third in the nation to offer a special business-income deduction on personal tax returns. But the incremental tax cuts will occur only if Missouri’s revenues keep growing.

The tax cuts could benefit about 2.5 million individuals and families, with the wealthiest standing to gain the most, and would provide an extra boost to hundreds of thousands of people involved in business partnerships, limited liability corporations or their own ventures.

The override vote capped an intense, multi-year campaign that included millions of dollars of advertising by tax-cut supporters and scores of opposition events across the state organized by Nixon. Republicans made the tax cut a priority for 2014 after failing last year to override Nixon’s veto of a more complex and expansive tax cut.

Kraus & Nixon Talking on Tax Cuts February 15, 2014

Missouri Times:
While details have yet to be released, Sen. Will Kraus, R-Jackson County, told The Missouri Times Friday that after months of negotiations with Gov. Jay Nixon, he will be introducing a legislative package in the senate that reflects a compromise reached with the Democratic governor on tax cuts.

Nixon vetoed a tax cut bill last year, drawing the ire of House and Senate Republicans. Kraus, who sponsored tax cut legislation last year and this year, said that he was “extremely pleased,” that Nixon was been willing to work with his office.

“There have been a lot of discussions between myself, the Governor and the Governor’s staff,” Kraus said. “And we now have a deal that, if my senate colleagues and members of the House can agree with, he will sign into law.”

Kraus declined to indicate specific measures in the bill, saying he had yet to show the language to his fellow senators or receive feedback from the caucus as a whole. But Nixon told reporters at a Missouri Press Association event today that he had certain demands for any tax cut package. Among them, Nixon indicated he would sign an income tax cut of up to one-half of a percentage point if the measure included full funding for the foundation formula and reform of some of the state’s most expensive tax credit programs. Nixon also said any deal should be contingent on at least $200 million annually in tax revenue growth.

Kraus declined to confirm or deny if any of these demands were met in his package, but hinted that at least some of the Governor’s demands would likely be met.

“I can’t release the details without hearing from my fellow senators first and foremost,” Kraus said. “But I can say that this is something he has told me he will sign if it gets to his desk.”

More: http://themissouritimes.com/8278/kraus-nixon-preparing-unveil-tax-cut-compromise/

Missouri Tax Cut Bill Waits for Talks between Senate And Nixon February 12, 2014

(AP) – The Missouri Senate has delayed a debate on tax cuts while negotiations continue with Gov. Jay Nixon’s office.

Senators had been expected to debate legislation Wednesday that would cut income taxes for individuals and many businesses.

But Senate Majority Leader Ron Richard said that debate will wait until next week to give more time for the Republican sponsor of the measure to try to work out a compromise with the Democratic governor’s office.

Nixon vetoed an income tax-cut bill passed last year, citing technical problems and concerns that the measure could drain money available for public schools.

Richard said negotiations are focused on the dollar amount of the proposed tax cut and whether it should apply both to individual and businesses that report income on individual tax returns

Missouri Lawmakers Lobby for ‘Border War’ Tax Cut On The Border May 21, 2013

A trio of Republican lawmakers, including St.Sen. Eric Schmitt from St. Louis County, campaigned in Kansas City Tuesday for the 2013 Missouri tax cut bill.
Schmitt met with members of the Greater Kansas City Chamber of Commerce at midday.
One of the Kansas City Chamber’s legislative priorities this year was finding ways to compete with the tax cuts and incentives the state of Kansas has used to attract Missouri companies to cross the state line.
Schmitt repeated his claim that while Kansas was first to cut taxes on corporations, small business and its income tax rates–Kansas wasn’t the first to think of it.
“We’ve been working on this before Kansas did,,” he told KMBC 9 News, “but this year, we actually got it done.”
Missouri lawmakers passed a measure calling for a drop in the corporate income tax to be phased in over several years; a tax cut for smaller companies–also to be phased in.
The measure also includes a cut in the Missouri income tax rate from 6% to 5.3%. It is the first such income tax cut in Missouri in 90 years..
Schmitt was hosted by Lee’s Summit Republican Senator Will Kraus. Some of the elements pushed in Schmitt’s bill were combined into Kraus’ version.
Clay County St. Rep. T.J Berry was the bill’s original House sponsor.
Missouri Governor Jay Nixon has not said if he’ll sign the bill or not. Nixon recently said he was worried about an estimated 800 million the bill coust cost the state because of the cuts.
Krause, Schmitt and Berry claim the Nixon number is wrong, that it’s too high. They claim it’s more in the range of $400-$700 million.
Kraus also countered by saying over a decade, the state would get a billion dollars more in money from a strong economy through the tax cuts.
“To bring in an additional one billion dollars over a 10 year period, to cut 700-800 million, i think is a responsible way to do tax policy in Missouri,” said Kraus.
In addtion to cutting taxes, Kansas offers incentives to Missouri companies to move across the state line.
One company, Central States Capital Markets, moved five miles to relocate in Kansas.
The firm, an investment company, had been on the western edge of Kansas City’s County Club plaza.
Dan Stepp, an executive with the firm, said it was the Kansas financial incentives, more than that tax rates, that helped the company to decided to relocate.
He also said the Kansas City suburban location in Prairie Village, Kansas, was easier to get to for many of the firm’s customers.

Nixon May Veto ‘Border War’ Tax Cut Plan May 12, 2013

(AP) – Gov. Jay Nixon indicated Friday that he is likely to veto legislation that would cut Missouri’s income taxes for businesses and individuals, saying he has serious concerns that it could jeopardize funding for essential government services.

The Democratic governor criticized the tax-cut plan just a day after it won final approval from a Republican-led Legislature that touted it as a means of remaining economically competitive in a battle for businesses with Kansas and other bordering states.

The legislation would phase-in a 50 percent deduction over five years for business income reported on individual income tax returns. It also would gradually cut Missouri’s corporate income tax rate nearly in half over and lower the top tax rate for individuals from 6 percent to 5.5 percent over the next decade.

The corporate and individual tax rate reductions would take effect only if annual state revenues continue to grow by at least $100 million over their highest point in the preceding three years.

Legislative researchers have estimated that the measure would reduce Missouri’s potential revenues by about $700 million annually when fully implemented. The nonprofit Missouri Budget Project, which analyzes fiscal issues and has opposed the income tax cut, has estimated the eventual cost at more than $800 million annually. Nixon adopted the higher cost estimate in his remarks Friday.

“Taking more than $800 million literally the equivalent of what you spend on higher education, or literally more than you have for all of corrections or mental health is not the fiscally responsible approach,” Nixon said.

Asked if he would veto the measure, Nixon stopped short of directly saying `yes’ but indicated that was likely.

“At this time, I’m certainly not looking at it with an eye to add it to the structure of Missouri government,” the governor said.

Legislators would need a two-thirds majority in both the House and Senate to override a veto. The House vote for the bill Thursday was six votes shy of that threshold, but there were nine members who did not vote.