From Stateline, April 29th
JEFFERSON CITY • Missouri’s Republican-led Legislature is poised to send Gov. Jay Nixon a bill that would cut the state income tax, especially for small businesses, while raising the sales tax to benefit three legislative priorities.
It would be the biggest change in the tax code in decades and the first step toward political mega-donor Rex Sinquefield’s goal of moving Missouri to a system that taxes consumption rather than income.
But Nixon, a Democrat, signaled last week that he would veto the bill. The governor repeated his position that the plan would shift the tax burden from corporations to seniors on fixed incomes and “is not the right approach to growing our economy or creating jobs.”
What’s more, if Republicans were hoping to override a gubernatorial veto, those hopes were dimmed last week when 19 Republican House members balked at the bill. The 90-68 vote fell 19 votes short of the two-thirds majority that would be needed for an override.
“I’m not one of those people who is too anxious to change the way things are going, especially when it comes to raising sales tax and barely reducing income tax,” said Rep. Don Phillips, R-Kimberling City, and one of the opponents.
Those dynamics could set the stage for negotiations with Nixon as the Legislature heads into the final three weeks of the legislative session. The bill’s sponsor, Sen. Will Kraus, R-Lee’s Summit, said that although he was happy with the House version of the measure, he was open to changes that could help win Nixon’s support.
With the May 17 adjournment date looming, Kraus said he hoped to take up the bill today after giving fellow senators the weekend to look over the House changes.
“My goal is to get something across the finish line, have the governor sign it and have some major impact for the state of Missouri on tax policy,” Kraus said.
SINQUEFIELD STARTED DEBATE
Though he’s playing a behind-the-scenes role, Sinquefield moved the issue to the front burner.
About seven years ago, he retired from his investment company and returned to his native St. Louis from California. He began making five- and six-figure political donations to advance his ideas to revamp the tax code and public education.
The drive for a tax cut picked up steam this year, after Kansas eliminated taxes paid by many small business owners.
Sinquefield helped finance a group called Save Missouri Jobs, which aired television and Internet spots calling on legislators to come up with a strategy to keep Missouri employers from moving across the state line.
Though they say they didn’t draft it, Sinquefield’s lobbyists have been working the Capitol’s hallways for the Kraus bill.
“It’s progress,” said Woody Cozad, a former Missouri Republican Party official who represents Save Missouri Jobs. “We’re for anything that makes the state more business-friendly, especially for small business.”