House backs a tax cut and a tax increase

The Missouri House has passed legislation that would trim the state's income tax and raise the sales tax as part of an economic competition with Kansas and other neighboring states.

The bill approved 90-68 on Wednesday would represent the most significant change to Missouri's tax code in at least a couple of decades. It now returns to the Senate, which passed a different version earlier this year.

Under the House plan, the top individual income tax rate would be cut by two-thirds of a percentage point over five years, so long as state revenues continue to rise by $100 million annually. Business taxes also would be cut. The sales tax would be gradually increased by three-fifths of a cent, with revenues earmarked to schools, a new mental hospital and roads.