Phases out the corporate income tax
If passed, SB370 will have significant implications for state revenue as it phases out corporate income taxes over a ten-year period. Proponents of the bill argue that this tax reduction could lead to increased business activities, potentially attracting new companies to the state and encouraging existing ones to expand. They believe that lowering the corporate tax will stimulate job creation and overall economic development in Missouri. However, the loss of corporate tax revenue might impact state funding for essential services like education and infrastructure.
Senate Bill 370 proposes the gradual elimination of the corporate income tax in Missouri. Starting from 2020, the corporate tax will decrease to four percent, and by 2030, no tax will be imposed on the Missouri taxable income of corporations. The legislation aims to create a more favorable business environment to encourage investment and economic growth in the state by reducing the tax burden on corporations. The bill also maintains that certain out-of-state businesses operating under specific statutes will not be affected by these tax changes.
Despite the advantages touted by supporters, SB370 has garnered criticism from various factions. Opponents are concerned about the long-term consequences of eliminating corporate income tax revenue, arguing that it could exacerbate budget shortfalls and hinder state support for public services. They contend that such tax cuts may disproportionately benefit large corporations while failing to provide adequate support for small businesses and local communities. Additionally, there are concerns that the projected economic growth may not materialize as anticipated, making the fiscal risk significant.
The bill is currently under discussion within the Missouri General Assembly, and its fate remains uncertain. Lawmakers will engage in debates weighing the potential economic benefits against fiscal responsibility and the need for a stable revenue base to support state programs and services.