JEFFERSON CITY - Several tax-cut bills took their first step in the legislative process Tuesday.
As the state's economy continues expanding, Missouri is taking in more tax revenue than the constitution allows. Legislative committees began the task of hearing the 70-plus bills that would bring the state under the revenue limit.
The Senate Corrections and General Laws Committee heard testimony on four bills that would expand the "circuit breaker" credit -- a property tax credit for low-income people aged 65 and older. Currently only those with incomes between $5,900 and $15,000 are eligible for up to a $750 credit.
"I didn't realize the concept would be so popular," said Sen. John Russell, R-Lebanon, author of one of the bills.
Gov. Mel Carnahan is supporting an increase in eligibility for the circuit-breaker tax credit as one of his two tax cuts for this session. Carnahan's other proposal would provide an income-tax credit for all property taxpayers.
Several senior citizens testified in favor of the bills.
"I'd like to see the good points of these bills combined and voted out of committee," said John Metzger of Troy.
That's what Chairman John Scott, D-St. Louis, said he expects to happen next week. Scott said a substitute for the four bills could be voted out of committee "very rapidly."
The estimated cost of the tax breaks range from $11 million to $15 million a year by 2001.
The income levels need to rise to match the cost of living, testified Rowena Conklin.
"What was qualified as a senior citizen with low income 10 years ago is a lot different than today," she said. "[The bill] provides some equity and relief for low-income senior citizens."
The Senate Ways & Means Committee heard testimony on other tax-cut bills Tuesday night.
Russell presented bills to repeal the state's capital gains tax and income tax on Social Security benefits.
He acknowledged repealing the capital gains tax, estimated to cost $225 million per year, will be "difficult to move."
"I would probably have to have the support of the administration and everyone else," he said following the hearing.
But Russell found support from Sen. Larry Rohrback, R-California, who said eliminating the tax on capital gains would be better than smaller, targeted tax cuts.
"Everybody that's involved in free enterprise in Missouri benefits on an equal basis, rather than government pulling strings and deciding who gets ahead, and who gets behind, and who gets screwed and who doesn't," Rohrback said.
Russell's bill eliminating the income tax on Social Security benefits drew support from Bill Trimm of the American Association of Retired Persons.
"The bill is consistent with AARP national policy that state citizens should not have to pay taxes on Social Security benefits," Trimm testified.
Russell said not taxing benefits is "just the right thing to do."
"Many senior citizen types do not have a large retirement fund outside Social Security," he said.
The House Ways & Means Committee heard three bills that would lower or eliminate the state sales tax on cars.
No votes were taken in any of the three committees. Debate over which taxes to cut and by how much is likely to continue throughout the four-month General Assembly session.
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