by Mike Ferguson
(St. Charles, MO) – It’s been approved, it’s been knocked down and now it’s about to be debated again.
The Republican tax reform plan that Governor Jay Nixon vetoed will likely be up for another vote this month. The annual Missouri Veto Session gets underway on September 11th.
Before the current politicians argue about the plan once again, the issue is discussed in depth on “Missouri Viewpoints.” Former State House Budget Chairman Carl Bearden (R) wants to see the GOP override the veto and reduce personal and business income taxes over the course of several years.
Former State Budget Director Jim Moody, who served under Republican Governor John Ashcroft, is backing Nixon’s veto.
Bearden now runs United for Missouri, a conservative advocacy group, and Moody runs James R. Moody and Associates, a government relations firm.
Bearden says the half-percent personal income tax reduction over time may not be something you feel in the pocketbook but he thinks the tax reductions for businesses will benefit the entire state.
“While you may get a little bit in your paycheck, the fact that you may be able to keep your job because the small business you work for got to keep more of their money, the fact that you might get a promotion or a raise because the small business you work for got to keep more of their money to put back into the business or the fact that you might even be able to find a better job, a job you actually wanted, because a small business got to keep that money, that’s really the key, I think.”
Governor Nixon, in his veto message related to the plan, called the idea “…an ill-conceived, fiscally irresponsible experiment that would inject far-reaching uncertainty into our economy, undermine our state’s fiscal health, and jeopardize basic funding for education and vital public services.”
Bearden takes issue with that assessment. “There really is very little risk in doing what the Legislature has done. This is a very, very modest tax decrease over a five to ten year period but one that I think will stimulate the economy and show that tax cuts do work.”
He points to aggressive tax cuts and incentives being used by Kansas in particular, saying those have attracted some Missouri businesses to their side of the border.
Moody disagrees with the claim that small tax changes will move businesses or keep businesses in place.
To Moody, the changes are a bad deal for the majority of Missourians, despite the claims they will kick-start the state’s economy and help those in the workforce now.
“When you look at the TV ads being run right now, they would lead you to believe this is a great deal for the middle class. This is not a great deal for the middle class. It is a great deal for the wealthy.”
While the percentage of tax reduction may be small, the impact, in Moody’s view, is disproportionate and doesn’t live up to the billing of a tax cut.
“The average family, a medium income family, in Missouri is going to get roughly six bucks a year in tax cuts. A wealthy person is going to get thousands a year in tax cuts and I think it’s just unfair and it’s kind of a scam on the middle class.”
Instead of tax cuts, Moody says the state should be spending more on education and support for growing industries like life sciences and animal health.
I don’t think tax policy creates economic development.”
When the veto session gets underway, Missouri lawmakers are only allowed to vote for or against a veto override. They are not allowed to amend vetoed bills. Republicans have enough members to override any veto but some GOP members have expressed concerns about doing so on HB 253.
On the web:
House Bill 253: http://www.house.mo.gov/billtracking/bills131/billpdf/truly/HB0253T.PDF
Governor Nixon’s Veto Message Pertaining to HB 253: http://www.house.mo.gov/billtracking/bills131/rpt/HB253vl.pdf
United for Missouri: http://www.unitedformissouri.org/
Coalition for Missouri’s Future: http://www.missourifuture.net/
James R. Moody and Associates: http://www.jamesrmoody.com/moody.php