Republicans are readying a new plan to cut state income taxes, one they hope will avoid the pitfalls that thwarted them in September when they failed to override a veto. The latest proposal would focus on tax relief for small businesses rather than corporations or families.
To minimize opposition, House drafters are shooting for a tax cut that would cost state coffers no more than $120 million a year. The author said his revised bill would strip out the personal and corporate tax breaks and tighten the 50 percent tax cut for businesses that “pass through” their income to the owners’ personal return. In a key move, the amount of business income that could be exempted would be capped.
Gov. Jay Nixon vetoed a broader tax cut last summer, calling it an experiment that would punch a hole in the state budget and hurt education funding. Now, after months of negotiations, some of the defectors say they are on board with the narrower bill.