Eliminating the state’s income tax won a first round approval on Tuesday on a voice vote from the house.
The bill’s sponsor, Rep. Ed Emery, R-Lamar, took the floor on Tuesday and told lawmakers that the state could eliminate the income tax, franchise tax and corporate tax by raising the state sales tax by a full percentage point. Emery said the tax is more predictable and fair.
“It’s more stable than the income tax,” Emery said. “It will catch the thieves, the cheaters and illegals because they will be paying taxes where they are not now. It would provide a real incentive for businesses moving to Missouri.”
Rep. Bob Nance, R-Excelsior Springs, said he likes many the aspects of the bill, but said there are still a lot of things that would have to be ironed out.
“I’m for a lot of discussion on that because it’s something that’s been talked about doing with the federal government,” Nance said yesterday.
According to Nance, early estimates have the state tax rising to 5.11 percent if the bill passes. He said although consumers would see more money out of their pockets at the cash register, prices could be offset by businesses paying less taxes if the franchise tax and corporate tax were eliminated.
“The idea is that it might actually bring down some prices if corporations aren’t being taxed on a lot of things.”
The bill’s opponents say increasing the state’s sales tax will make it harder on businesses close to the state line when it comes to competing with other states with lower taxes.
“I suggest he go out there to businesses in Kansas City, St. Louis, Springfield, Joplin and Cape Girardeau and all the other businesses and all the other cities that surround this state and ask them how they want to compete with their competitors over the state line,” said Assistant Minority Floor Leader Rep. J.C. Kuessner, D-Eminence.
The bill will have to pass a roll call vote before heading to the Senate. Nance said he expects the Senate would make changes to the bill.