Missouri legislature passes income tax cut, ditching plan for eliminating corporate tax

Republican lawmakers approved a plan to cut income taxes in Missouri on Thursday, abandoning a last-minute addition that would have also slashed tax rates for businesses while sending a package to Gov. Mike Parson's desk over the strong objections of Democrats.

The final deal reduces the top individual income tax rate from its current 5.3% to 4.95% in 2023, followed by another future cut that would bring it down to 4.8% and a series of "triggers" that would continue to lower the top rate by .1% annually if the state sees significant economic growth.

Once the plan is fully implemented, the top individual income tax rate will be 4.5%, lower than all of Missouri's neighboring states. It also removes the bottom income tax bracket, making the first $14,000 of earned income tax-exempt.