Missouri Governor Parson calls for income tax cut

COLUMBIA, Mo. (AP) — Republican Missouri Gov. Mike Parson on Friday vetoed a one-time, limited tax refund and instead called on state lawmakers to pass a broad-based tax cut on revenue.

Parson proposed a special legislative session focused on reducing Missouri’s personal income tax rate, which is 5.4% for most taxpayers, to about 4.7%.

Missouri has excess revenue, in part due to repeated federal stimulus funding during the COVID-19 pandemic. Parson wants to use some of that extra funding for tax relief, though he didn’t provide details on what it might cost.


“Now is the time to give back to hard-working Missourians,” Parson said.

He proposed increasing the standard allowance and reducing the number of tax brackets. The governor also recommended reducing income taxes entirely for people who earn $16,000 or less a year or for couples who file jointly and earn less than $32,000.

Parson has yet to decide when to call lawmakers back to Capitol Hill for a special session to work on tax changes, but said he wants the tax cuts to go into effect by Jan. 1, 2023.

Parson has proposed cutting income taxes as an alternative to the single tax refund planned by lawmakers, which he vetoed on Friday.

Under the bill passed by lawmakers, taxpayers would have gotten a one-time tax credit of up to $500 for individuals and $1,000 for couples. Refunds would have been given only to people earning less than $150,000 and couples earning less than $300,000 a year.

In practice, people would have received a refund of $1 for every $1 of tax owed until their tax bill reached the refund limit of $500.

Democratic lawmakers had argued the tax refund would only benefit middle-income families because the poorest workers don’t pay income taxes and there isn’t enough money set aside to provide the full $500 or $1,000 to all who qualified.

Parson echoed similar concerns when announcing his veto on Capitol Hill Friday, telling reporters that “no one was ever going to get direct checks for $500 or $1,000” under this bill.

“Because of the underfunding of the temporary program, some Missourians would have received between $100 and $200, while many would have received nothing,” he said. “Hard-working Missourians — including low-income, high-income, and vulnerable populations — would have seen little to no relief.”

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