Missouri Gov. Mike Parson signed legislation on Wednesday cutting the state income tax and authorizing agricultural tax credits, marking a likely end to legislative activity in 2022.
Parson called lawmakers back into a special session to pass legislation that cuts the income tax from 5.4% to 4.95%. It would bring the rate down even more if certain general revenue targets are met.
Republicans like Parson have argued that it makes sense to cut taxes when Missouri has a record budgetary surplus.
“Now is the time to give back to Missourians — time to give back some of their hard-earned money,” Parson said in signing the bills. “Our strong economic position is thanks in large part to responsible and strategic decisions.”
Parson wanted an agricultural tax credit bill that featured incentives for meat processing plants and biodiesel that lasted for six years. The regular session bill only extended the tax credits for two years.
“Vetoing the ag bill was something I didn’t take lightly,” he said. “But when Missouri farmers and ranchers and ag businesses get a bad deal, they trust us to make it right.”
The income tax was the more contentious item of the special session. Democrats argued that the legislation would provide a relatively small amount of benefit to working-class Missourians while putting state services at long-term risk.
Some Democrats, like state Rep. LaKeySha Bosley of St. Louis, said it would have made more sense to cut taxes on food or diapers, which would have directly benefited low-income workers more.
“That would be a better way for us to show our appreciation to Missourians and give them some relief,” Bosley said.
When asked about the criticism that the tax cut won’t help Missourians with relatively small incomes, Parson said it makes sense that people who make more money would get a greater benefit from the legislation, since they pay more in state taxes.
“I'm very confident that if we give that money back to those people … they're gonna invest it right back in the economy,” Parson said.
Parson also said he’s open to other ideas, including reducing taxes on groceries or corporate income taxes. But he added, “You also have to do something you feel like you can get passed” by the legislature.
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