Gov. Jay Nixon vetoes Missouri income tax cut bill
05/05/2014 4:42 PM
05/05/2014 4:42 PM
Gov. Jay Nixon on Thursday vetoed a $620 million tax cut proposal, setting up a possible showdown next week with the Republican-dominated Missouri General Assembly.
Nixon, a Democrat, visited a school for the disabled in St. Louis to announce that he would veto the bill later in the day. He called the bill “an unfair, unaffordable and dangerous scheme.”
The legislation would gradually cut the state’s top individual income tax rate from 6 percent to 5.5 percent and phase in a new 25 percent deduction for business income reported on personal tax returns. The tax cuts would begin in 2017, but only if state revenues grow by at least $150 million.
The governor contends the bill also contains an error that could eliminate taxes on all income over $9,000, busting a $4.8 billion hole in the state budget. Republicans say the governor’s analysis is “laughable.”
Sen. Will Kraus, a Lee’s Summit Republican who sponsored the tax cut proposal, said the governor is ignoring the benefits of tax cuts in his argument.
“Not only does this responsible tax reform put money back in the hands of the people who earned it,” he said, “it will also act as an economic driver for the state of Missouri.”
Thursday was Nixon’s deadline for taking action on the bill. On the same day, Moody’s Investors Service announced it wasreducing the bond rating for the state of Kansas
. It specifically cited the 2012 enactment of income tax cuts as a factor.
Nixon said Missouri Republicans are trying to “follow Kansas down the fiscally irresponsible path.”
A two-thirds vote in both the House and Senate would be required to override the governor’s veto. Republicans would need to vote as a bloc and pick up the support of at least one House Democrat for a successful override.