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Missouri Senate panel OKs its own tax cut proposal

Missouri Senate panel OKs its own tax cut proposal

February 13th, 2018 by Associated Press in Missouri News

The Missouri State Capitol is pictured in this file photo from 2012.

Photo by Julie Smith /Fulton Sun.

JEFFERSON CITY, Mo. (AP) -- Even as Missouri's Republican governor hits the road to promote his $800 million tax overhaul proposal, a Republican-led Senate panel has endorsed its own tax cut plan worth an estimated $630 million.

The 421-page Senate version endorsed Tuesday by the Ways and Means Committee is likely to become the basis for further talks with Democrats and members of the House, who are working on their own tax reduction plan, the St. Louis Post-Dispatch reported.

Greitens was in St. Joseph Tuesday touting the tax plan he announced in January. He is scheduled to visit Warrensburg on Thursday and the town of Mexico on Friday.

The Senate proposal differs from Greitens' plan in that it includes a 6-cent increase in the state's motor fuel tax, phased in over three years.

GOP Sen. Bill Eigel of Weldon Spring believes his proposal that includes the gas tax hike with a series of tax breaks is the only way to push the long-sought increase through the Republican-controlled Legislature.

Greitens said in a statement last week that he opposes an increase to the state's 17-cent-per-gallon fuel tax.

"The governor is committed to tax reform," Eigel said. "I think he is going to be a partner in this."

Eigel's plan also calls for the income tax rate of 5.9 percent to drop to 5.25 percent. The corporate tax rate would drop to 4.25 percent from the current 6.25 percent.

To offset the cuts, the plan calls for repealing the federal standard deduction for individual income tax filers and replace it with a staggered deduction based on income levels. Wealthier taxpayers would receive a smaller percentage of a deduction.

It also would start the process of collecting sales taxes on online purchases.

Critics from both sides of the aisle have expressed concern about tax cut plans. Democratic Auditor Nicole Galloway last week warned that the state could become another Kansas, which faced severe fiscal problems after enacting tax cuts.

Eigel said his plan would spur growth.