We encourage Missouri lawmakers to override Gov. Jay Nixon's veto of an income tax cut for businesses and individuals.
We believe the measure provides sufficient safeguards for government operations and programs. At the same time, it offers reasonable tax relief to spur economic development and ease the burden on taxpayers.
The tax cut is a priority for Republican majorities in the Legislature and generally opposed by Democrats, including the governor.
Our support this year reverses our objection last year to a similar proposal. The previous measure was approved by lawmakers and vetoed by Nixon, who ultimately prevailed. We supported Nixon's veto because of what we considered a fatal flaw, a provision to lift the tax exemption on prescription drugs.
The GOP admitted the provision was an error, but pushed for passage, contending the flaw would be fixed later. We could not support the bill, knowing it was flawed.
This year's bill appears to contain no similar error. Nixon's contention the tax cut would have a "crippling impact" is unsubstantiated. And his characterization of the bill as a "dangerous scheme that would defund our schools" is becoming tiresome.
In reaction to the veto announcement, the Missouri Chamber of Commerce claimed Nixon "has been falsely painting this as an education-versus-business issue."
The chamber represents business and industry, which are not opposed to education. Quite the contrary - employers rely on an educated workforce.
That being said, Nixon's emphasis on education has merit. The formula that determines state aid for public schools was approved by the lawmakers, and they have have a responsibility to fully fund it.
Republicans say they intend to meet that responsibility. They point out the incremental tax cuts do not begin until 2017, only if annual state revenues continue to increase by at least $150 million over their pinnacle from the previous three years.
Some highlights of the proposal include:
• It gradually reduces the state's top individual tax rate - now applied to all taxable income over $9,000 - from 6 percent to 5.5 percent. It also would phase in a new 25 percent deduction for business income reported on personal tax returns, sometimes called "pass-through business income." (See the Viewpoint by Brad Jones for more about the effect on businesses).
• About 2.5 million taxpayers could benefit from the reduction of the top individual income tax rate, according to the Missouri Department of Revenue.
• A family of four with a business owner making $100,000 annually could get a tax cut of more than $1,600, according to revenue agency projections. The relief for business owners admittedly is greater than for individuals - projected at $32 for a family of four earning $44,000 - because the tax cut focuses on economic development, business expansion and job creation.
In 2013, the governor had the more persuasive argument and we supported his veto.
This year, Republicans have crafted a cleaner, less-sweeping proposal with sufficient safeguards. Override the veto.