By Bill Lant
Special to The Globe
PINEVILLE, Mo. —
While much is being made of the state income tax-fueled “Border War” between Kansas and Missouri — and rightfully so — we would be remiss to overlook the same threat that exists here in Southwest Missouri between our state and neighboring Oklahoma.
Recently, Kansas and Oklahoma have extended their line of sight and taken steps to put themselves on more competitive footing with their neighbors. Effective Jan. 1, Kansas reduced its individual state income tax and completely eliminated it for owners of limited liability companies and subchapter S corporations, making the personal financial picture on the Kansas side of Kansas City much brighter and more attractive for folks interested in keeping more of their hard-earned dollars in their own pockets.
Similarly, in 2012, Oklahoma Gov. Mary Fallin led the effort to reduce the top income tax rate from 5.5 percent to 5.25 percent. Since then, propelled by a pro-economic growth agenda, Oklahoma has created more than 62,400 jobs, giving it the fourth-highest growth rate in the United States. In her State of the State address last month, Fallin laid out plans in her agenda to cut an additional 0.25 percentage points from Oklahoma’s top individual income tax, which is in line with her long-standing promise to gradually phase out her state’s income tax.
And therein lays a real threat to Southwest Missouri. However, Missouri legislators are now witnessing that a simpler, flatter tax code may be becoming a practical necessity. Strides in that direction are being made this legislative session, and I applaud those efforts. It is time Missouri gives serious consideration to updating the system of double taxation we have tolerated for far too long.
Under our current system, Missourians are taxed by the state twice on our income.
Once on the money we earn, and again when we spend it. Other states have come to recognize that people spend what they have, so allowing taxpayers to keep more of their earnings actually stimulates economic growth, which translates into more jobs. More jobs and more people working translate into a better, more stable, prosperous Missouri.
Unless we take measures to keep up with growing income tax reform efforts throughout the country, we are going to be bleeding residents and wealth not only into neighboring states, like Oklahoma and Kansas, but also nearby Texas, which has long been one of nine states without an income tax and has been thriving. Other states working hard to enter the “Race to Zero” include Louisiana, Iowa, Nebraska, Wisconsin and North Carolina.
The time to act is now, before Missouri gets left in the dust. Please join me in supporting income tax reform here in Missouri.
Bill Lant, R-Pineville, is a Missouri state representative.