After much floor debate, and procedural maneuvering by Assistant Minority Leader Corey Mock to set up a separate vote on the corporate taxes, Rep. Craig Headland’s proposed income tax cuts (HB1250) have passed.
Here’s what the bill does:
The financial institutions tax rate goes from 6.5% to 6%. That’s a $2.4 million cut.
The number of corporation income tax brackets get reduced from three to two, and the bill lowers the top corporate income tax rate from 5.15% to 3.30%. That’s a $140 million tax cut.
The number of individual income tax brackets get reduced from five to three, and rates are lowered to .9% for the lowest tax bracket, 1.9% for the middle bracket, and 2.9% for the top bracket. That’s a $361 million tax cut.
All told, this bill cuts income tax burdens by $503.4 million. The personal income tax cuts passed on a 92-1 vote (Democrat Rep. Steve Zaiser was the lone no vote). The corporate tax cuts passed on a strictly party-line vote.
The question now is, how much will the Senate water these cuts down? A nearly unanimous vote in the House sends a pretty strong message to the Senate, I think.
Later this week the House will vote on $742 million in “property tax relief,” but that’s not real relief. That’s cost shifting from the local to state level. But these income tax reductions are real tax relief.
I’ll have video of the wrangling on the floor later.
Update: Here’s the video of the floor debate: