![]() ![]() Cutting the CIT and FIT in half would cost the state $474 million in tax revenue and would increase business investment incentives by 8%, cutting marginal effective tax rates on investment from 3.24% to 2.98%.He looks at the effects of these cuts on both the state revenue and investment incentives for businesses within the state. In this paper, Richard Evans, Senior Research Fellow and Director of Open Policy, uses an open source model to examine the effects of two possible cuts to the CIT: 50% and 100%. Eliminating it would have a positive effect on Missouri businesses. Currently at 4% (4.85% for financial institutions), the state CIT is only a small percentage of state revenues. Missouri already has one of the lowest corporate income tax rates in the country. It proposes to reduce the Missouri corporate income tax (CIT) and financial institutions tax (FIT) with gradual rate reductions over the next four to five years. One of the more popular reforms has been included in several bills. Missouri legislators are considering several tax policy reforms that would continue to support the state’s growth while leaving some reserves available for potential economic downturn in the future. Compared to other US states, Missouri’s total reserves and balances are the ninth highest in the country. ![]()
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