By Kevin Murphy
KANSAS CITY, Missouri (Reuters) - Missouri's Republican-controlled state Senate voted Tuesday to roll back income taxes, following the lead of neighboring Kansas and over the strong objections of Democratic Governor Jay Nixon.
By a 23-11 vote, the Senate sent the House a bill that would slightly reduce corporate income taxes over a five-year period, reduce the maximum tax rate on individuals and corporations and nearly double the $2,100 deduction for residents making less than $20,000 annually.
To offset the cuts, the bill calls for an increase in the state's sales and use tax from 4 to 4.5 percent, phased in over five years.
The move came amid heavy pressure from lawmakers in western Missouri concerned that recent income tax cuts engineered by Republican Governor Sam Brownback in Kansas would send companies and jobs over the state line.
"This bill represents a significant, broad-based tax cut for all Missourians who pay taxes, both residents and businesses," said state Senator Will Kraus, a suburban Kansas City Republican and sponsor of the bill.
In the prepared statement, Kraus said the bill reflects input from Democrats by giving tax breaks to small business and low-income residents.
In a letter to state senators on Monday, Nixon said cutting income taxes while raising sales taxes shifts the burden from the wealthy to those less fortunate.
"Everyday necessities, from clothing to Kleenex, would become more expensive," Nixon wrote.
"This shift would hit seniors and veterans living on fixed incomes especially hard."
Kraus said Nixon waited until the last minute of the two-month tax bill debate to make his views known. He described as "offensive" Nixon's suggestion that the bill harms veterans.
"Missourians deserve the truth, and the truth is that SB 26 represents an affordable tax cut that will save every taxpayer money," Kraus said.
(Editing by James B. Kelleher and Eric Walsh)
Source: http://news.yahoo.com/missouri-lawmakers-vote-roll-back-income-taxes-024955521--business.html
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