Missouri House Bill 253…Vetoed! (Part I)
To the surprise of absolutely nobody, Missouri Gov. Jay Nixon vetoed Missouri House Bill 253, which would have cut individual and business income taxes. Nixon lays out the reasons he vetoed the legislation in his veto message. I will highlight some of his reasons.
First, according to Nixon, Missouri is already a low-tax state. I addressed this concern in an earlier post. In some areas, Missouri is a low-tax state; in others, it isn’t. Regarding income taxes, Missouri has a higher income tax rate than most of its neighbors, including Kansas and Illinois. If you factor in the fact that both Saint Louis and Kansas City have earnings taxes, the rates are significantly higher.
Second, Nixon claims that HB 253 would increase taxes on prescription drugs. Patrick Ishmael wrote a blog post concerning this issue. Officials with the Missouri Department of Revenue (DOR) say the legislation keeps the sales tax exemption in place. According to DOR officials, “the language provided to Legislative Research by the Missouri Department of Revenue protected the sales tax exemption for prescription drugs.” That’s also what I came away with; I read the bill.
Nixon also criticizes HB 253 for removing the sales tax exemption for college textbooks. That would be bad…why? I’m in favor of expanding the sales tax base and I don’t think college textbooks should be exempt from the sales tax. Yes, it would add more to the cost of going to college, but as a college graduate, I can assure you, textbooks were not the biggest cost factor for many of my peers and me (and I had scholarships).
I will have more to say about Nixon’s veto message. There is a lot in it to digest and the legislature will have its hands full if it wants to override the veto. However, while I do not think HB 253 is perfect, I do think it is a step in the right direction and will make Missouri a more attractive place to do business.