Haley Swaino
COLUMBIA, Mo. (KMIZ)
Missourians could find themselves with more money in their pockets if proposed federal tax changes make it through the Senate.
From 2025 through the end of 2028, single filers could receive an additional $1,000 and joint filers $2,000, according to a Tax Foundation analysis.
At the same time, the U.S. House-approved “One, Big, Beautiful Bill Act” could mean at least $170 million in cuts to Missouri state revenues. The House approved the bill in May and it now awaits a Senate vote.
“Any time there’s a big federal bill, especially something of this size, it has a lot of downstream effects on Missouri budget and what that means Missouri can afford,” Show-Me Institute Director of State Budget and Fiscal Policy Elias Tsapelas said.
Changes to taxes at the federal level are reflected in state tax returns. This means that federal tax changes would make standard deductions go up for Missourians.
“The standard deduction increase benefits everyone, of course, but it has a greater benefit for lower and middle income taxpayers,” Tax Foundation Vice President of State Projects Jared Walczak said. “Your higher earners are likely itemizing.”
Higher standard deduction levels set by the Tax Cuts and Jobs Act are made permanent under the GOP tax plan. The bill includes a temporary increase for the federal standard deduction.
An increased federal standard deduction can reduce state income tax revenue, but the extent depends on individual state tax laws and how they follow the federal tax code.
Not all states conform to the federal standard deduction, but Missouri is among the handful of states that do. Arizona, Colorado, Idaho, Missouri, New Mexico, North Dakota, South Carolina and Utah and the District of Columbia could all temporarily boost their standard deductions.
Rep. Jason Smith (Mo.-8) applauded the potential taxation changes in a statement on Friday. Smith, a Republican, is chair of the House Ways and Means Committee.
“The bill locks in the doubled guaranteed standard deduction from the 2017 Trump tax cuts and enhances it, giving additional relief to 94 percent of taxpayers in Missouri’s 8th Congressional District,” Smith said in a statement.
Critics of the tax plan say it delivers more relief to upper-income earners at the expense of services meant for low-income Americans.
Missouri taxpayers would benefit from a $9.1 billion reduction in their federal tax obligations under the plan, according to the Institute on Taxation and Economic Policy. More than 20% of this total will be allocated to the top 1% of earners in Missouri, those making over $689,300.
Filers in that group would receive an average tax reduction of $58,490. In contrast, taxpayers in the bottom 40% would receive only a small fraction—one-twentieth—of the overall tax cuts proposed in the bill.
“For most taxpayers, this would be tax relief,” Walczak said. “And some of it we really get tax relief. But as you think about the long term impact of these decisions, it is once again increasing the debt, increasing the deficit, and some of it’s really poorly targeted.”
The bill also includes cuts to social program budgets such as Medicaid and SNAP, known commonly as food stamps. An estimated 14,000 Missourians ages 55-64 could lose their federal food benefits if changes to the Supplemental Nutrition Assistance Program make it through the Senate, according to previous reporting.
“Some of the Medicaid stuff does seem pretty controversial, I think there’s still probably plenty of room for the Senate to make changes,” Tsapelas said.
Walczak agreed that the more than 1,000-page bill is likely to undergo some changes in the Senate.
“If you’re worried about your tax burden, this bill is probably fine for you,” Walczak said. “If you’re worried about whether it’s spending well or whether those tax savings are well targeted, I think it raises more questions.”
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