Tax Plan Hurts Working Families, Benefits Top 1%

I stand in strong opposition to HCS SB163 (Schnelting), a bill that prioritizes permanent tax cuts for the wealthy over fiscal stability and equity for all Missourians. At a time when future federal funding and economic conditions remain uncertain, this legislation recklessly locks in revenue reductions that will undermine our ability to fund schools, infrastructure, and essential services. 1. Permanent Revenue Cuts Jeopardize Missouri’s Fiscal Future This bill slashes over $800 million annually through capital gains tax deductions ($625 million) and corporate tax cuts ($180 million), permanently shrinking state revenue. These cuts come as Missouri relies on federal funds for 40% of its budget—including critical roads, health care, and education programs. If federal matching rates change, Missouri’s treasury will face sudden shortfalls without the revenue to respond. Locking in cuts today ignores the unpredictable fiscal needs of tomorrow. 2. Capital Gains Cuts Overwhelmingly Benefit the Wealthy The capital gains deduction is a handout to the top 0.8% of earners. IRS data shows just 23,800 Missourians earning over $500,000 annually claimed 65% of the $13.3 billion in capital gains in 2022. Meanwhile, the bill eliminates the Earned Income Tax Credit (EITC), stripping vital support from low-income working families. This is not “tax relief”—it is a reverse Robin Hood scheme, exacerbating inequality. 3. Flat Tax and Property Tax Changes Harm Middle- and Low-Income Families Shifting to a flat income tax rate (eventually as low as 3.3%) disproportionately benefits high earners, while doing little for those who need it most. Combined with property tax restrictions (capping levy growth at 3% and redefining “new construction”), these changes will starve local governments of revenue needed for schools, fire departments, and infrastructure. Reducing personal property assessment rates further drains resources, privileging businesses over communities. 4. Missouri Cannot Afford Ideological Experiments Proponents claim these cuts will spur growth, but Kansas’ 2012 tax cut disaster—which triggered budget crises and service cuts—proves otherwise. With federal funding uncertain, Missouri cannot gamble its fiscal health on permanent tax breaks for the wealthy. I urge you to reject this bill. Prioritize sustainable revenue, equity, and the needs of all Missourians—not just the privileged few.