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Missouri lawmakers may slash state income tax - KOAM TV 7

Missouri lawmakers may slash state income tax, increase sales tax

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Debate continues over a sales tax increase in Missouri after a bill makes it's way to the state senate.

Missouri's legislature looks into slashing income taxes for individuals and business while increasing sales tax.

The Republican led House of Representatives passed the bill last week and now it is the Senate's turn.

Supporters say slicing state income tax will help Missouri stay competitive with states like Kansas.

But opponents says imposing a higher sales tax that would fund schools and roads puts an unfair burden on lower income individuals.

"I think the fear here is with those states having lower income taxes people are going to move, or businesses are not going to come to Missouri, if they can go somewhere else where their employees can enjoy lower income tax and I think that is probably the impendence for this bill," says Nii Adote Abrhams, a professor of economics at Missouri Southern State University.

The bill was passed in the House by a 90-68 vote, which is not enough to override a governor's veto if passed in the senate.

Governor Nixon has come out against similar proposals in the past.

While people for the change think it will help businesses stay competitive, others say increasing sales tax may put an unfair burden on those who can least afford the higher sales tax.

"What is going to get affected?" asks Abrhams.  "Higher education, public education, K-12, social programs.  What is going to get affected? So, you know, in economics we say there is no such thing as a free lunch.  If you're going to get less revenue then something's got to give, so that's what you have to look at in terms of the Devil being in the details."

If passed it will be the biggest change to Missouri tax code in the last century.

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