JEFFERSON CITY – The individual income tax rate will decrease for Missouri residents under a new law approved by the Missouri legislature, and signed by Governor Mike Parson.
Also approved during a special session - $40 million in renewed agricultural tax credits that had expired.
These credits extend out for six years and benefit companies involved in meat processing, biodiesel and ethanol production, and urban farms. It also expands government loan programs for farmers.
Individual income taxes in Missouri will drop from 5.3 to 4.95% beginning next year, and potentially phase in additional cuts until the rate hits 4.5% - paid for by the state’s revenue surplus.
Parson claims the tax cuts mean more money for Missourians to spend, invest and save. Opponents argue that the income tax decrease will mean a cut in social services, and benefits rich Missourians rather than working class people.
As reported by the St. Louis Post-Dispatch: The Missouri Budget Project, a nonprofit think tank that analyzes state spending and revenue, projects the first year cost at more than $500 million.
For taxpayers making $30,000 annually, the move from 5.3% to 4.95% will lower their tax bill by about $10 for the year, according to the Missouri Budget Project.
An income of $86,000 would see a $120 reduction in the yearly income tax bill.
Those earning $152,000 would get a $320 reduction, the group said.