This article first appeared in the St. Louis Beacon, Jan. 10, 2012 - State Sen. John Lamping, R-Ladue, has followed through with his plan to file a bill that eliminates state income taxes on the first $2,000 in individual income and replaces the money by hiking the state's cigarette tax -- now among the nation's lowest.
Lamping says the bill is revenue neutral.
Under his proposal, SB 638, no Missourian would pay taxes on the first $2,000 of earned income. Now, state income tax is levied on all income, no matter how small. That cut would cost the state $128 million a year.
(The bill is slightly different from the $3,000 no-tax threshhold Lamping had initially considered in an interview with the Beacon last summer.)
"This reduction of Missouri state income taxes signals to taxpayers that we are doing everything we can during these tough economic times to ensure they keep as much of the money they earn as possible," Lamping said in a statement.
To replace the $128 million, Lamping proposes to increase Missouri's cigarette tax to 43 cents a pack, from the current 17 cents. Such a hike would still put Missouri's cigarette tax among the nation's lowest -- and far below the national average of $1.46 a pack.
