Gov. Jay Nixon dismissed an individual income tax cut advanced by the Missouri Senate as a “nonstarter” because it does not address tax credit reform. The governor, who vetoed a tax cut last year, said any tax package he would sign must include controls on credits that finance development of low-income housing and renovation of historic buildings. Together, those programs cost state taxpayers about $223 million last year.
The Senate plan, which is up for a final vote on Monday, would gradually cut the state’s top personal income tax rate to 5.5 percent from 6 percent. The cut would take effect in increments of 0.10 percentage points over five years. Another key provision would phase in a 25 percent deduction, in 5 percent steps, for business income reported on individual tax returns.