SB 509: Governor Jay Nixon (D) strikes back

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General Assembly, governor, Jay Nixon, missouri, SB 509, taxes

The right wingnut republican controlled General Assembly made a big boo boo. Is anyone surprised?

A press release from the office of Governor Jay Nixon (D):

Senate Bill 509: Impacts of Section 143.011.2(4) Eliminating Top Income Tax Bracket

April 22, 2014

“With the simple stroke of my pen, this bill would separate Missouri from every state in the nation – as the only one unable to meet even the most basic obligations to its people,” Gov. Nixon said. “For generations, Democrats and Republicans have worked together to protect Missouri’s spotless AAA credit rating and keep our state on a fiscally responsible path. Now is not the time to veer off this proven course. That’s why I’m calling on members of the legislature to abandon this dangerous scheme, and work with us on a responsible approach – like the one I laid out earlier this year – that will protect public education and keep our state moving forward.”

Senate Bill 509 [pdf] contains a provision that would eliminate entirely the income tax for Missouri taxpayers with incomes over $9,000.

Missouri’s tax code contains a number of brackets, or ranges of income subject to certain levels of taxation. Currently, the top individual income tax bracket applies to all Missourians with incomes greater than $9,000 a year.

The new Section 143.011.2(4) in Senate Bill 509 provides that once the legislation is fully phased-in, the top tax bracket “shall be eliminated.” Eliminating this top tax bracket would result in a new top tax bracket that applied to taxpayers with Missouri taxable income “Over $8,000 but not over $9,000.” However, there would no longer be a tax bracket for Missourians with incomes over $9,000, thereby eliminating altogether the income tax for such taxpayers.

This analysis is supported by the independent legal opinion of Professor Cheryl D. Block of the Washington University School of Law. For more than thirty years, Professor Block has taught classes on tax law, legislation, and statutory interpretation. Professor Block is an expert on tax policy and author of a leading textbook on corporate taxation, which is in its fourth edition.

Professor Block’s analysis confirms that the language in Senate Bill 509 would “completely eliminate the top state personal income tax bracket” and, as a result, taxpayers with incomes “over $9,000 would pay no tax at all.”

A fiscal analysis performed by the Office of Administration, Division of Budget and Planning, shows that the provision eliminating the income tax on Missourians with incomes greater than $9,000 would reduce state general revenue by approximately $4.8 billion annually, eliminating 97 percent of all individual income tax collections and wiping out 65 percent of the state’s general revenue budget.

A fiscal impact of this magnitude would jeopardize even basic funding for education and vital public services and is likely to result in a downgrade to Missouri’s spotless AAA credit rating, maintained over decades and reaffirmed by all three leading independent credit rating agencies just last year.

The legal analysis from Washington University School of Law Professor Cheryl D. Block is available here. [pdf]

The fiscal estimate produced by the Office of Administration, Division of Budget & Planning is available here. [pdf]

[….]

[emphasis in original]

Meanwhile, the usual republican suspects sputter:

John Diehl, Jr ‏@johndiehljr

@eyokley Governor’s contention of #SB509 flaw is laughable. MO SupCt would never take his position on that reading of the bill. 7:58 AM – 22 Apr 2014

There’s so much win in that.

Denny Hoskins, CPA ‏@DLHoskins

#SB509 is a tax cut for MO individuals and small businesses, NOT special interest groups. @GovJayNixon needs to read the bill! #moleg 10:25 AM – 21 Apr 2014

Apparently Governor Nixon (D) did. And so did professor Cheryl Block. You’d know that if you had read her analysis.

MOSenate08 ‏@MOSenate08

@J_Hancock @jshormanNL @johndiehljr Looks like the governor is once again grasping at straws. I’m confidant courts would uphold the intent. 8:47 AM – 22 Apr 2014

That’s the right wingnut republican version of “we didn’t mean what we wrote”. This truly inspires confidence.

Peter Kinder ‏@PeterKinder

Will the unhinged hysteria campaign of #MO @GovJayNixon against #tax cuts work this time? 1:10 PM – 22 Apr 2014

Thank you for that, Captain Dunsel.

Meanwhile:

Tony Messenger ‏@tonymess

Remember when #moleg GOP said last year they could fix all the mistakes from last year’s messed up tax cut bill? Instead they made new ones. 10:12 AM – 22 Apr 2014

Tony Messenger ‏@tonymess

Once again, @rexsinquefield overreaches by trying to eliminate his tax bracket, while his minions suggest otherwise. When will #moleg learn? 10:13 AM – 22 Apr 2014

Tony Messenger ‏@tonymess

Can’t imagine the #MOGOP would sabotage their own tax cut bill so they could go through entire charade again next year. #kaching #moleg 12:14 PM – 22 Apr 2014

They would have to possess a modicum of understanding for that theory to be operative.

Previously:

New Missouri Rule: if the governor governs right of center you can’t call him a “liberal” (July 1, 2013)

Bill signing Kabuki (July 12, 2013)

Rep. Chris Kelly (D): HB 253 – “I’d like to know what your opinion is.” (July 19, 2013)

Rep. Denny Hoskins (r): probably not gonna sustain the Governor’s veto of HB 253 (August 19, 2013)

Sec. of State Jason Kander (D) to Texas Gov. Rick Perry (r): You forgot about that Medicaid thing? (August 23, 2013)

Rep. Denny Hoskins (r) to UCM on HB 253: I don’t care, I’d rather be the new Speaker Pro Tem (August 24, 2013)

Rep. Denny Hoskins (r): your constituents know what you’re doing to them (August 26, 2013)

HB 253: Because those dissolute leeches at the public trough should shut up, that’s why! (August 28, 2013)

Missouri Democratic Party on HB 253: Yes, yes, let’s talk about Texas Gov. Rick Perry (r)…. (August 28, 2013)

AG Chris Koster (D) to Speaker Jones (r) on HB 253: you all certainly made a mess of things… (August 29, 2013)