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Missouri lawmakers override veto, enact tax cut

JEFFERSON CITY, Mo. — Missouri’s Republican-led Legislature enacted the state’s first income tax rate reduction in almost a century Tuesday by overriding the veto of Democratic Governor Jay Nixon, who has denounced it as a reckless financial experiment.

The law will gradually cut Missouri’s top individual income tax rate starting in 2017 and make the state just the third in the nation to offer a special business-income deduction on personal tax returns. But the incremental tax cuts will occur only if Missouri’s revenues keep growing.

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The tax cuts could benefit about 2.5 million individuals and families, with the wealthiest standing to gain the most, and would provide a boost to hundreds of thousands of people involved in business partnerships, limited liability firms, or their own ventures.

The override vote capped an intense, multiyear campaign that included millions of dollars of advertising by tax-cut supporters and scores of opposition events organized by Nixon.

The GOP holds large majorities in both chambers but needed a little Democratic help to accomplish the two-thirds vote required to override this year’s veto. The House voted 109-46, with Democratic Representative Keith English of suburban St. Louis joining all 108 Republicans. The GOP-led Senate voted Monday to override the veto on a party-line 23-8 vote.

Like colleagues in other states, Missouri Republicans touted the tax cut as a means of remaining competitive with their neighbors and boosting the economy as revenues rebound from the Great Recession. But the tax-cutting trend has not been limited to Republican states. About a dozen states passed income tax cuts last year and at least half that many already have voted to cut income taxes this year, including Democratic-led New York and Republican-led Oklahoma.

Nixon has raised concerns that it could jeopardize funding for essential state services while providing a much larger benefit to the rich than the poor.

Republicans tout the revenue trigger as an important safeguard for Missouri’s budget. But had the law been in place, a revenue increase in the 2008 fiscal year would have caused a tax cut to occur in 2009 as revenues plummeted as a result of the recession.

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