Senate Ways and Means Committee Hears Earned Income Tax Credit Bill

This week, the Missouri Senate Ways and Means committee heard SB 183, sponsored by Sen. Lauren Arthur (D-Kansas City), that would establish a state earned income tax credit for Missouri's working poor. SB 183, which differs from a companion House bill, HB 291, sponsored by Rep. Bill Kidd (R-Independence), would reduce the state tax liability of the working poor, allowing them to keep more of their earned income. The federal earned income tax credit was first signed into law by President Gerald Ford in the mid-1970s. The bipartisan tax credit program has been viewed as a success for encouraging work and helping many working-class families to rise out of poverty.  

Unlike the House version of the tax credit, SB 183 proposes a refundable credit and comes with a much higher price tag. It isn't likely to pass in its current form given the cost, but the sponsor of the bill is willing to negotiate the terms of the proposal to advance the bill. The MCC testified in support of the bill, arguing that it encourages work, which is important for human dignity. The legislature faces some tough economic decisions in the coming weeks, and bills with a negative fiscal impact face an uphill battle. The House version of the earned income tax credit would cost an estimated $41 million. SB 183 is estimated to cost over $600 million, making its chances of passing extremely slim in its current form.

March 15, 2019 - 1:19pm
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