Sen. Mike Moon attempts to eliminate corporate income tax again

BY QUINN S COFFMAN

missouri news network

Two bills heard Monday seek to cut income taxes for corporations in Missouri.

Sen. Mike Moon, R-Ash Grove, sponsored the more aggressive of the two bills, which would reduce the income tax rate for corporations — currently at 4% — over five years until it is fully eliminated.

The second bill that was heard would introduce a system of cuts that could eventually reduce the rate to 2.25%.

“Some will ask well, why should we give back money to business owners?” Moon said. “There are business owners … who I think realize that when money is allowed to stay in your hands, you can do several different things, whether you spend it, you invest it, you save it, all that results in increased revenues to the state.”

Moon said that the high volume of tax credits offered by Missouri shows the state has room to lower taxes.

Corporate tax cuts, sometimes categorized as part of “supply-side” or “trickle-down” economics, are intended to draw more businesses into a state or to allow businesses to expand their operations. Moon argued this would be true of his bill as well, allowing the lost revenue to be recollected as the state prospers overall.

Reducing corporate income taxes has been a pillar of the Missouri Republican party for years, with Moon having presented versions of this bill in the last few sessions.

Missouri Republicans have been successful in recent years reducing a variety of taxes, including during Gov. Mike Parson’s 2022 special session, which focused on individual income taxes.

Moon said that his Senate colleagues are interested in further cuts, but that it’s uncertain if it will be prioritized on the Senate floor.

Otto Fajen, representing the Missouri National Education Association, spoke in opposition to both bills. His concerns were focused on the possible impact of these cuts on other legislation attempting to improve working conditions for teachers in Missouri.

“We’re just concerned that any progress that the legislature might want to make on recruitment, retention or teacher salaries could be undermined by a cut of this magnitude,” Fajen said.

Fiscal estimations attached to Moon’s bill show that it could eliminate over $176 million in corporate taxes in its first year. By 2029, with corporate income taxes fully abolished, the bill would keep nearly $900 million in income taxes from being collected from corporations.

Fajen was also concerned with how the bill would affect funding for local municipalities. Fiscal notes show that over $30 million could be lost to these municipalities by 2030 as well.