Yet another state has proposed raising taxes on low-income residents to pay for new corporate tax breaks. Leading lawmakers in Missouri want to eliminate a property tax credit for low- and moderate-income seniors and people with disabilities in order to help finance new tax credits for businesses.
Sadly, swaps like this are increasingly common; both Michigan and Wisconsin have cut low-income programs this year to pay for business tax breaks.
The Missouri proposal, which the legislature will consider in a special session that begins today, would make renters ineligible for the state’s property tax "circuitbreaker" credit. Landlords generally pass along a large share of their property taxes to tenants in the form of higher rents; the circuitbreaker credit helps offset those higher rents for more than 100,000 low-income and disabled Missouri residents. (Homeowners are also eligible for the credit, but this proposal wouldn’t affect them.) Some 29 states offer property tax circuitbreakers or similar programs.
Killing this tax credit would raise taxes on some of Missouri’s most vulnerable residents by up to $750 a year. It would also hurt local retailers and other businesses, since low-income people are among those most likely to spend every dollar they have. That’s not a smart deal for Missouri.