For Immediate Release, May 17, 2018
Lawmakers are set to give a huge tax break to profitable corporations while undermining our ability to fund schools, health, roads, and other things Missourians need. At the same time, lawmakers are considering scrapping a tax credit that would give a boost to hard-working Missouri families.
Today, the House approved a massive corporate tax cut, once again putting corporate profit margins before people. Meanwhile, the Working Families Credit, or State Earned Income Tax Credit, which would give as many as 500,000 working families in Missouri who have low wages a modest tax cut, has not received final approval.
The House approved an amended version of Senate Bill 884, which would cut Missouri’s corporate income tax by more than one-third, taking it from 6.25% to just 3.9%. If approved, Missouri would have the second lowest corporate income tax rate in the nation.
Year after year, lawmakers have chosen costly tax cuts aimed at profitable corporations and the richest households, and yet Missouri has little to show for it except an inability to adequately support the building blocks of our state’s economy.
Cutting the Corporate Income Tax rate will predominantly help large out-of-state businesses and their out-of-state shareholders. A Working Families Credit-EITC would instead help real Missouri families, those that live here, work here, and shop here.
Legislators should put people first. Instead of rushing a poorly constructed tax measure through at the tail-end of the legislative session, lawmakers would be better off to take advantage of a proven strategy and approve of the Working Families Credit-EITC.
Thirty states and the District of Columbia have similar state-level credits, which have proven to have lasting benefits, particularly in the educational, health and economic outcomes for children.
What’s more, this ill-conceived corporate tax giveaway is being considered at the same time that Missouri is unable to afford basic services and infrastructure that our communities, families and economy need to prosper.
Missouri already ranks well below other states in terms of the services it provides its residents. Recent budget cuts have diminished those services further, and the continued phasing in of 2014’s tax cuts will likely make the situation even more dire. The bill passed by the House would be another big step in the wrong direction.
- State funding for higher education per student has been cut by more than one-third over the last decade;
- At 22% of the poverty level, eligibility for medical assistance for parents with low wages is the lowest in the nation. Parents can earn no more than $385 per month for a family of 3 and still qualify for health care assistance in Missouri;
- Child care assistance at 138% of the federal poverty level is well below the national average of 180% of the federal poverty level, and below nearly all neighboring states; and
- Reimbursement rates for foster parents are just $10 per day, about half what parents receive in other states.
Not only have services been cut over the last decade, each year they compete against each other for more limited increases. Services for our grandparents are pitted against services for our children; and education competes against transportation needs.
Moreover, Missouri’s budget struggle is likely to worsen due to the implementation of the 2014 Kansas-like tax cuts that are still being phased-in. When fully implemented, the 2014 tax cuts will reduce state revenue by $720 million per year – the equivalent of all mental health services in Missouri.
#
