Missouri Gov. Mike Parson has decided against adopting a new federal offer that would allow the state to defer payroll taxes for state employees.
With the decision, which came after more than a month of consideration, the state becomes the latest to reject President Donald Trump’s overture that stood to impact thousands of workers by ceasing to take the 6.2% tax out of paychecks of people earning $4,000 or less per biweekly pay period beginning Sept.1.
“We do not believe our state employees would be advantaged by doubling their tax obligations between January and April of 2021, in exchange for temporarily reduced taxes for three months this year,” said Chris Moreland, spokesman for the Office of Administration, which oversees payroll and other operational functions for state government. “We reached out to a variety of business organizations, employers and other states to see if they were participating and most have elected not to participate. For these reasons, we will not be participating in the payroll tax deferral.”
Among other republican controlled states, Missouri joins the likes of Indiana and Arizona in saying no to the measure.
The idea became a bone-of-contention after the president recently floated the proposal after congressional talks over a new coronavirus stimulus package grew stagnant.
According to the St. Louis Post-Dispatch, for the 53,246 workers now on the state’s payroll that would have equaled out to an average monthly increase in take-home pay of about $250 through the end of the year.
The sticking point is the taxes would only be deferred and not eliminated, meaning people would be on the hook to repay the funds in early 2021.
Overall, Missouri spends about $14 million each month in payroll taxes, which are used to fund Social Security. Across the state, many business and trade groups have also gone on the record as being opposed to the plan, arguing it will create a significant tax liability for workers.
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