Missouri Governor Jay Nixon (D) has asked the state’s TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Credit Review Commission to meet on September 12 after news broke of a 15 percent increase in state tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. claims by taxpayers.
The Commission had issued a report (PDF) back in late 2010, reviewing the state’s tax credits. They calculated that tax credits altogether reduced the state’s general revenue by 8 percent, with many of them unjustifiable, inefficient, ineffective, or better suited for the annual appropriation process. They recommended that the Legislature eliminate 28 special interest tax credits, revise another 30 credits, adopt sunset rules and budget caps on all remaining credits, and seek to buy back outstanding tax credits to prevent future budget problems.
The Legislature considered the changes in 2011 but progress was stymied by recipients of some of the credits. For example, the Commission recommended capping historic preservation tax credits at $75 million; the latest numbers show the state paid out over $130 million in such credits. State Rep. Chris Kelly (D) put it quite colorfully:
“As long as you talk about tax credits generically, they are Satans,” Kelly said. “As soon as you or the governor or anybody else starts talking about them as individuals, they are angels.”
Share