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Missouri’s GOP-led House sends income tax break to Senate


April 22, 2022

Missouri’s Republican-led House passed a bill Thursday that would give rebates of up to $1,000 for state income taxes owed this year.

Lawmakers voted 103-44 to send the nonrefundable tax credit legislation to the GOP-led Senate, where Republican Majority Leader Caleb Rowden said it faces an uncertain path forward.

The House proposal would allow for rebates of up to $500 per individual or $1,000 for married couples.

In practice, if an individual owes $1 in state income taxes when they file, they would be repaid $1. If an individual owes $600 in income taxes, they would be reimbursed $500.

Individuals and couples who didn’t owe anything wouldn’t qualify.

The legislation would set aside $1 billion in surplus revenue to pay for the tax rebates.

Republican proponents in the House said Missouri should return money to taxpayers when it has a surplus.

“We think Missouri taxpayers should get it back and that they know what to do with it better than we do,” said Republican House Budget Committee Chairman Cody Smith, who sponsored the legislation.

He said while debating the bill Thursday that he thinks “taxation is theft.”

Democrats argued that the promise of tax breaks of up to $500 or $1,000 is misleading because many taxpayers would get little to nothing back, with the wealthiest slated to receive the biggest rebates.

The lowest wage earners — those who bring in $22,000 a year or less — would on average get a refund of $18 under the bill, according to the nonprofit Missouri Budget Project. Households that make $552,000 a year or more, which is considered the top 1% of earners, would get $884 back on average.

The Missouri Budget Project analyzes state financial issues with an eye toward their impact on low-income residents.

“We’re not really supporting the hardworking men and women who need it most,” Democratic Rep. Rasheen Aldridge said of the bill. “We’re going to be giving it to people who are already well off.”

Rowden said Thursday that although Senate Republicans support returning money to taxpayers, there’s disagreement over whether Smith’s proposal is the best way to do that. He said he’s “always for trying to find ways to give money back to the middle class” and that ideally, everyone would qualify for a tax break.

Senate Minority Leader John Rizzo said Democrats favor a refundable tax credit, meaning all income tax payers would qualify for money back. A Republican-sponsored bill that would provide $500 refundable tax credits to all taxpayers this year has not yet made it out of committee.

Missouri lawmakers face a May 13 deadline to pass legislation.