Yesterday, Missouri Governor Mike Parson signed a personal income tax cut into law. Effective January 2019, the personal income tax rate will drop from 5.8% to 5.4% across the state of Missouri. Parson praised the work of state lawmakers who pushed for the change.
Elijah Haahr, Speaker Pro Tem in the Missouri State House, authored the tax-rate changes. According to Haahr, his goal is to help Missouri become one of the ten states with the lowest personal and business tax rates in the nation.
“I think it sends a signal to the country,” says Haahr. “If our business tax rate and income tax rate are both in the bottom ten in the country, then this is a good place to move your family; to move your business.” Haahr wants to use low tax rates as an economic development tool for Missouri. Also, some business owners think lower tax rates will also positively affect employee performances.
Mary Beth Hartman, the owner of Hunter Chase & Associates, believes that more money in her employees’ pockets means “they don’t have some of the issues at home to deal with regard to finances.” This small financial ease will, in turn, will make them happier and better employees.
However, there are some who remain skeptical. Lower personal income tax rates might negatively affect state funds and budgeting. More money for employees means less money is going to the state of Missouri, but Haahr claims there are built-in triggers in the law to prevent any outstanding problems. These “triggers” only allow cuts to once state revenues increase, avoiding all tax cuts occurring at one time.
In either case, new personal income tax laws mean new tax calculations. Volpe Consulting and Accounting Services will accurately calculate your income tax earnings with ease. Our tax prep systems can help you flourish by alleviating any professional or personal tax and accounting struggle.