The governor argued in a letter to Missouri Senators that contrary to claims by supporters that the proposal is a tax cut, the legislation would actually result in Missourians seeing their taxes increase, along with the cost of everything they buy.
That's because the bill, which is expected to pass the Senate this week, increases the sales tax by one cent to pay for a gradual reduction in income and corporate taxes over five years. Over that same time, a 50 percent tax deduction on business income also phases in.
"Everyday necessities, from clothing to Kleenex, would become more expensive,” Gov. Nixon wrote. “Families would have to pay more for the same products, putting an additional strain on household budgets.”
Supporters contend the proposal is needed to stem the tide of businesses fleeing Missouri for Kansas.
According to analysis by the Associated Press, a family with two working parents and two children earning slightly more than Missouri's median household income of about $45,000 would save about $35 a year under the tax proposal.
When fully implemented, the legislation is estimated to cut state revenue by roughly $500 million
Nixon says this plan simply "shifts the tax burden away from corporations and the most affluent onto those who can least afford these added costs."
"I have long opposed schemes like this one that would shift costs onto families because they reflect the wrong priorities and do not work," Nixon wrote. "Putting an additional financial burden on each and every Missourian would threaten the progress we have made and hamper our economic recovery."
The governor is calling on lawmakers to oppose the legislation.
Senate President Pro Tem Tom Dempsey, a St. Charles Republican, told Missourinet that Nixon didn't become engaged in discussion of the bill until it had already been given initial approval. He said the plan is still to give the legislation final Senate approval this week.
"Maybe the governor's office will be more involved when (the bill) gets to the House," Dempsey said.