Seventh District State Rep. Mike Lair has announced he will vote to override Gov. Jay Nixon’s veto of HB 253 when the Missouri Legislature meets in special session next week.
Lair, R-Chillicothe, notified the media via e-mail about his intentions in a letter received on Wednesday afternoon. HB 253 involves propsed business and Individual tax cuts and was proposed as an economic development tool to draw new and/or keep existing business in the state. Following is the letter as received by the Republican-Times.
Because of the volume of mail that is being distributed about the override efforts on HB 253, I want to send you my rational for voting in favor of the override. This same rational will appear in my weekly LOG on Sept. 9, but I feel the timely distribution of this information will counter some of the misinformation that is flooding the media.
Every Veto Session revolves around one or two bills that seem to create a political feeding frenzy. The single greatest communication generator of the 29 vetoed bills this year is House Bill 253. On the surface, it is a modest attempt at tax reform that has been labeled as irresponsible, devastating, harmful, injurious, dreadful, overwhelming, everything but fattening.
I have unscientifically counted at least 50 organizations that have weighed in on either side of the issue. I took my time deciding my vote on the override. When the bill first came to the House floor, I weighed the positive and negative aspects objectively and voted in favor of it. I remember the overwhelming popular support for a tax reduction, the safeguards that have been built into the bill, the ninety-two years that have passed since taxes have been reduced in our state, and its non-effect on education funding. First, let me share what is in the bill:
a. Beginning with the 2014 tax year, the maximum tax rate on personal income will be reduced by 0.5 percent over a period of 10 years. However, the reduction can only occur if the tax revenues collected in the current year exceed those collected in the prior year by at least $100 million.
b. Taxpayers will be allowed to deduct 10% of business income for the 2014 tax year and, once fully phased-in, will be allowed a 50% deduction for all tax years after the 2017 tax year.
c. Reduces the tax rate on corporate income by 3% over a period of 10 years, beginning with the 2014 tax year. However, the reduction can only occur if the tax revenues collected in the current year exceed those collected in the prior year by at least $100 million.
Tax Amnesty: Allows a taxpayer with unpaid taxes prior to December 31, 2012 to apply for amnesty and pay the unpaid taxes in full from August 1, 2013 to October 31, 2013 without penalty.
Streamlined Sales Tax: This allows the State to enter the multistate Streamlined Sales and Use Tax Agreement to simplify the process and incentivize sellers to collect sales tax on e-commerce transactions.
According to House Budget Chair Rick Stream, “Now, let’s talk about the fiscal effect that HB253 will have on this fiscal year assuming the General Assembly overrides the veto in September. Using only the numbers provided by the governor’s Office of Budget and Planning, nexus changes equals +$7 million, tax amnesty +$51.8 million, corporate income tax rate -$5 million, individual income tax 1k deduction -$20.7 million, business income tax 50 percent exclusion – $18.2 million. This means that if we override HB253, the State will have an additional surplus of $14.9 million dollars in FY14.”
Every argument that the Governor and his Attorney General make revolves around the federal government passing the Fair Marketplace Tax Bill. I personally spoke with our Congressional delegation at our caucus two weeks ago and in unison, they all stated that bill will never even hit the floor of the House. I want to restate the fact that many of you that have written me to sustain the governor’s veto are respected friends and I must respectfully disagree with your position on this issue. If I believed that HB253 would cost school funding one nickel, I would not vote for it.
If you have further questions, please feel free to call my cell phone 660-247-1856 or write to this email address.
Rep. Mike Lair