A Missouri Senate committee is scheduled on Thursday to hear testimony on a bill that would get the state rolling at a faster clip on the Kansas-style road to ruin.
We can only hope that lawmakers heed the “dead end” signs.
Senate Bill 574, sponsored by Eric Schmitt, a Republican from Glendale, basically doubles down on the tax-cut package that Missouri unwisely enacted in 2014, when lawmakers overrode a veto by Democratic Gov. Jay Nixon.
That law reduces the top tax rate on personal income over a period of years, beginning next fiscal year, assuming the state achieves sufficient economic growth. Schmitt’s bill speeds up the amount by which the top rate would be reduced, and lowers it to 5 percent. The 2014 law gradually lowers the rate from 6 percent to 5.5 percent.
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The 2014 law also pays homage to Kansas Gov. Sam Brownback’s infamous “experiment” by giving a break to owners of certain types of businesses, those that “pass through” their business earnings to be declared as income on the owners’ personal tax returns.
Kansas exempts owners and partners of these types of businesses from paying any state income tax. Missouri opted in 2014 for a 25 percent exemption once fully phased in. Schmitt’s bill seeks to increase that exemption to 50 percent.
But why? The exemption is proving highly divisive in Kansas. The number of people who qualify has grown as businesses are restructured to take advantage of the new law. Meanwhile the state is cutting and borrowing every year in order to stay afloat. Brownback’s promised “shot of adrenaline to the heart of the Kansas economy” hasn’t materialized.
If Missouri lawmakers want to tamper with their 2014 tax bill, they should revoke the 25 percent exemption.
It’s unclear how much traction Schmitt will gain for his bill. He filed the same proposal last year, and it didn’t get off the ground.
Schmitt, who is running for state treasurer, should have a chat with Kansas Treasurer Ron Estes, who has the unenviable job of managing cash flow in a state without enough cash.
But more likely Schmitt is listening to Missouri multimillionaire Rex Sinquefield. He continues to spin falsehoods about the Kansas tax cuts and to bankroll the campaigns of politicians, including Schmitt, who promote income tax cuts.
Other lawmakers should put the brakes on Schmitt’s bill. We have seen where this road leads and Missouri doesn’t want to go there.