(March 6, 2007) The Taxpayers Research Institute of Missouri is pleased that HB 621, a bill to reinstate the federal income tax deduction, sponsored by Rep. T. Scott Muschany (R-87, St. Louis, pictured at left) received a hearing in the House Special Committee on Tax Reform today.Speaking for the bill, Ray McCarty, Executive Director of the Institute, said, "This bill represents priority legislation of the Taxpayers Research Institute of Missouri. The bill would reinstate the federal income tax deduction that was reduced by SB 380 in 1993 for individual and corporation income taxpayers."
McCarty testified, "The current law imposes a state tax on federal tax dollars and represents a tax on a tax. It is unfair to apply state income taxes to federal income tax dollars and this bill would remedy this bad tax policy." McCarty also pointed out to the committee that SB 380 represented the last time a governor and legislature were able to raise taxes significantly without a vote of the people. Following passage of SB 380, the governor and legislature endorsed a change in the Hancock Amendment that prevents future governors and legislatures from raising taxes without approval.
The Taxpayers Research Institute of Missouri also drafted language to eliminate any impact to the Outstanding Schools Trust Fund as a result of this bill and has furnished the language to the sponsor. The new language would allow the federal income tax deduction to be reinstated without affecting school funding through the Outstanding Schools Trust Fund.
