Governor Greitens Discusses Proposed Tax Overhaul in Springfield
Country music played over the loudspeakers as a small crowd gathered in the warehouse at Arrowhead Building Supply in the Partnership Industrial Park in north Springfield. They were awaiting the arrival of Missouri Governor Eric Greitens who was on a two-day tour across the state to unveil his plan to cut taxes.
Outside the business, a few demonstrators held signs saying "Kiss My Tax" and "MO Women Deserve Better." One of them was local college student Lindsay Duede who came to protest the Greitens administration for policies it has implemented, which she said "have disproportionately affected women" in Missouri.
"For example, last summer he (Greitens) held a special, wasteful, unnecessary special legislative session to add over 30 pages of restrictions on a woman's ability to get a safe, legal abortion here in the state."
She's concerned about the tax cuts Greitens is proposing and the effect they might have on her as someone who is already concerned about finances.
Inside, before talking about the plan, Greitens touted his accomplishments as governor since he took office a year ago.
He pointed to the state's low unemployment rate and increased manufacturing jobs and the way he said his administration has "brought common sense back to government."
He told the crowd his administration is planning to get rid of 33,000 of the state's 113,000 regulations. And he touted his work on pro-life issues, pointing to what he called "the special pro-life session of the legislature" last August to make sure pregnancy care centers are protected.
"Well, just last week, a couple of lawyers in the office came in, and they said, 'because of the pro-life work that you did supporting pregnancy care centers, Governor, we've gotta tell you that now you're being sued by the Satanic Temple.' Now, I said to them, I said, 'guys, if Satan's lawyers are suing us, we're probably doing something right,'" said Greitens as the crowd cheered.
His planned tax overhaul, according to Greitens, would include:
- Cutting the top personal income tax rate from 5.9 percent to 5.3 percent
- Implementing a "Workers First" tax cut, a non-refundable credit against tax liability equal to 20 percent of the federal earned income tax credit
- Cutting the corporate income tax rate from 6.25 percent to 4.25 percent
- Eliminating certain unnecessary tax breaks and closing loopholes to make the tax reform effort revenue-neutral
Greitens said, under his tax overhaul plan, everyone in Missouri who makes over $9,072 would receive a 10 percent cut in their tax rate.
Under the "Workers First" tax cut, according to Greitens, a person who is eligible for the federal earned income tax credit would also get an amount equal to 20 percent of their federal EITC off of their state tax bill.
"Because of the Workers First tax cut," said Greitens, "380,000 of the hardest working Missourians are going to see their tax bills cut to zero dollars and zero cents."
It's a plan he said, "that rewards and incentivizes work."
Greitens said the corporate income tax reduction he proposes would give Missouri the second-lowest corporate income tax rate in the country among states with such a tax. Missouri currently requires a 6.25 percent flat tax on all corporate income. According to Greitens, lowering this tax would bring business to Missouri since the "corporate tax environment is among the first considerations when deciding where to invest."
In order to cut taxes in a way that's fiscally sound, he claims his team has developed a tax cut plan that is revenue-neutral. He said, by eliminating special breaks and loopholes in the state's tax system, "we can find alternative ways to ensure that Missouri's revenue stays steady."
He proposed eliminating timely filing discounts. Businesses in the state currently get a two percent discount for filing withholding taxes on time, he said.
And, according to Greitens, Missouri should require all corporations to use Single Sales Factor, which he said, "will simplify the tax code and incentivize hiring and investment in Missouri."
He also suggests phasing out, as income rises, federal income tax deductions. And he proposes streamlining the sales and use tax agreement.
Both Democrats and Republicans have expressed concern about cutting taxes now. Greitens last week released his FY2019 budget proposal, which includes more than $68 million in cuts to higher education and slashes the budgets of several other organizations in the state. He said, "we've had to make tough choices this year."
When asked what he'd say to those who are concerned about the effects the tax cuts would have on state revenues, Greitens replied, "what I'd say to Democrats, Republicans, Independents, what I'd say to anyone around the state of Missouri, is that this is a really thoughtful, responsible plan that's gonna reduce taxes for 97 percent of Missourians. And I'd say we have to make sure that we're taking care of working families in the state of Missouri."
Governor Greitens postponed his tour after news reports that he had an affair with his hairdresser in 2015. He's denied allegations that he took photos of the woman and blackmailed her to stay quiet.