Taxpayers Research Institute Supports Gibbons' Franchise Tax Elimination Plan

The Taxpayers Research Institute of Missouri supported SB 590, sponsored by Senate President Pro Tem Michael Gibbons (R-15, Kirkwood, pictured at right), a bill that would phase-out the Missouri Corporation Franchise Tax over a period of 4 years. The bill was heard by the Senate Ways and Means Committee on Monday. The franchise tax is, in the words of the late Sen. Harry Wiggins, former chairman of the Committee, “...a tax businesses pay for the privilege of paying more taxes.”

“We believe any usefulness of the tax has certainly expired and urge the committee to consider the economic benefits of eliminating the tax,” said Ray McCarty, Executive Director of the Institute. “The method of lowering the rate gradually also benefits all payers of the franchise tax, including larger taxpayers that pay the vast majority of the franchise tax.” For many taxpayers with fewer assets, the tax may be eliminated entirely if they provide health insurance and pay at least 50% of the premiums for their full-time employees. “We believe this provides an incentive to provide insurance and a funding source to help smaller businesses provide insurance that may not be able to afford insurance coverage now,” said McCarty. “We urge the committee to support this legislation.”