Charlie Davis: This is the year we will reduce taxes in Missouri

In a portion of his latest newsletter, Rep. Charlie Davis, R-Webb City, talks about legislation passed by the House to lower taxes for Missourians and Missouri businesses.

Last year saw the legislature engage in a public battle with the governor as he fought to deny a tax cut your legislature wanted to provide to hard- working Missourians. His reasoning at the time was based on economic fallacies including a false assertion that cutting the tax rate would jeopardize funding for education. The governor also employed other illogical arguments as he wasted taxpayer dollars in the new taxpayer funded plane he purchased to campaign all over the state against lowering your tax burden. The end result was a veto of the tax cut we passed and a decision made by those of us here in the legislature to revisit the issue this year.

This week we made good on our promise to renew our effort to reduce your tax burden as we approved two bills to lower that burden for both Missouri families and businesses. The first bill (HB 1253) would implement a 50 percent deduction for business income. It also would cut corporate income tax from 6.25 percent to 3.125 percent over a period of five years. For these tax savings to be phased in, state revenues would have to remain above the level they were in 2012 (the largest budget in state history at that time). The bill would reduce the tax burden on Missouri businesses by nearly $350 million per year.

The second bill (HB 1295) implements a reduction of the individual income tax rate from 6 percent to 5.3 percent over a period of seven years. It also increases the current deduction for individuals who earn less than $20,000 annually from $2,100 to $3,100. The bill also includes the business income tax deduction. To protect education funding, the legislation also requires revenues to increase by $150 million annually. In addition, the bill specifies that of the revenue increase, $60 million would go to public schools and $30 million to higher education in each year. The bill is estimated to produce a tax savings for Missourians of more than $700 million annually.

I am excited that we have moved these bills to the Senate so early in the process, and equally thrilled that our Senate counterparts are hard at work on their own versions of a tax cut. This week we also saw Missouri Attorney General Koster publicly support lowering the tax burden here in Missouri because he believes that will create a better business climate. Even more encouraging is that our governor is starting to understand that the public desires a reduction in our tax burdens and so even he is now indicating he will support lowering your tax burden.

It seems like this will be the year that we will reduce taxes in Missouri and open the door for growth and opportunity for families and businesses. We have seen in states like Oklahoma, Kansas and Tennessee where a lowered tax burden actually causes revenues to go up rather than down. As we look to position Missouri for long-term economic prosperity it is imperative that we allow our citizens and businesses to keep more of their hard-earned dollars so they can reinvest in their communities. After all, you know far better how to spend your money than does the government.