As introduced:  The individual state income tax would be reduced by lowering current tax rates and expanding current income brackets. The bill would also reduce the current top corporate income tax rate from 7.81% to 6.70% which would match the top individual income tax rate under the proposal. Finally, the bill proposes to repeal the inheritance tax in its entirety. This is the tax that is imposed upon beneficiaries of decedents.

As amended:  The portions relating to corporate income taxes and the inheritance tax were removed.  The income tax portion was reduced to have a smaller overall fiscal impact.  Individual state income tax rates would be reduced as follows:

Tax Year 2013

 Married, Filing Joint    Head of Household     Single Individual      Tax Rate

0 – 4,799                                    0 – 4,499                            0 – 2,399                         2.46%

4,800 – 34,999                         4,500 – 27,999              2,400 – 17,499                    3.51%

35,000 – 53,999                   28,000 – 39,999           17,500 – 26,999                  5.01%

Over 54,000                            Over 40,000                  Over 27,000                      6.84%

Tax Year 2014 and Beyond

0 – 5,999                                    0 – 5,599                          0 – 2,999                         2.46%

6,000 – 35,999                            5,600 – 28,799              3,000 – 17,999                   3.51%

36,000 – 57,999                        28,800 – 42,999            18,000 – 28,999                5.01%

Over 58,000                             Over 43,000                     Over 29,000                    6.84%

This analysis from the Open Sky Institute shows the average tax cut in different income ranges:

Introducing Senator(s): Cornett at the request of the Governor, McCoy (priority), Brasch, Janssen, Lambert, Larson, Pirsch, Price, Schilz

Committee: Revenue Committee

Committee Hearing Date: January 26, 2012

Current Status: Signed into law on April 10, 2012.

Estimated Fiscal Impact: 

The bill is expected to result in the following state revenue loss:

According to the Open Sky Institute, the tax cut will result in the following increase in the overall budget shortfall:

Voices for Children Position:  Oppose

Voices for Children opposed this bill due to the minimal relief provided to most working families and the projected increase in the budget shortfall.  Budget shortfalls have historically resulted in cuts to programs serving children and families.  Voices for Children is concerned that this loss of revenue is likely to result in additional cuts.

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