Our Opinion: Let veto sound call to reconstruct tax cut
News Tribune editorial
Saturday, June 8, 2013
Some veto messages are more loud and clear than others.
Democratic Gov. Jay Nixon was particularly vehement in his objections to an income tax cut orchestrated and approved by the Republican-led Legislature.
At the end of the legislative session on May 17, Nixon signaled he was cool to the measure. Earlier, this week, he hinted at a veto when he revealed a poison pill in the form of lifting a sales tax exemption for prescription drugs.
Proponents of the bill called on the governor to sign it and permit lawmakers to repair the untended action in the future.
The governor made it clear with his veto Wednesday the offending provision is only one of his many objections to the tax cut.
He called the proposal “an ill-conceived, fiscally irresponsible experiment.”
His reasons for that description include:
• Missouri already is a low-tax state.
• The projected loss of revenue is artificially low.
• The tax cuts would jeopardize funding for education, public safety and social services.
• Provisions of the tax cut are vague, inequitable or both.
Republican proponents of the bill have signaled they will attempt an override during the September veto session. An override is possible, but hardly a lock.
Missouri’s measure was prompted, in large part, to keep pace with Kansas, which is cutting taxes to lure businesses. Paradoxically, Kansas now is attempting to fix a revenue shortfall created by that tax-cutting effort.
Opponents of the measure have used that turn of events to criticize Missouri’s “race to the bottom” with Kansas.
Missouri lawmakers, however, wisely included a provision to help safeguard income by linking corporate and individual tax rate reductions to state revenue growth.
In theory, tax cuts will attract greater economic development, which translates into added tax revenues. The theory has merit, but potential benefits dissipate if and when states get into a bidding war to attract businesses by lowering taxes.
We agree with the governor that repeal of the tax exemption on prescription drugs is a flaw. Although it may be an unintended flaw, it must be fixed before passage.
We do not, however, consider the measure ill-conceived and fiscally irresponsible.
Missouri’s status as a low-tax state is an asset — one that deserves to be enhanced through prudent legislation with responsible safeguards.
Let this veto sound not a death knell, but a call to reconstruct tax-cut legislation.
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